NPS Domestic Stock Holdings Lose 182 Trillion Won in Value, Marking First Quarterly Decline in Seven Quarters

Closing prices for the KOSPI, SK hynix and Samsung Electronics are displayed on an electronic board at Woori Bank’s dealing room in central Seoul on Oct. 15, after the benchmark index plunged 7.57%. The market value of domestic listed stocks held by South Korea’s National Pension Service (NPS) fell by more than 182 trillion won, or approximately $136.63 billion, over the past three and a half months. After delivering record gains through the second quarter, the pension fund saw much of that value wiped out in a single quarter, drawing criticism that it failed to serve as a “safety net” for the domestic stock market. According to FnGuide, a financial data provider, the combined market value of shares held by the NPS in 287 listed companies in which it disclosed stakes of at least 5% stood at 333.53 trillion won as of Oct. 15. That was down 182.40 trillion won, or 35.3%, from 515.93 trillion won at the end of June. The value of these holdings recorded its first quarterly decline in seven quarters, dating back to the fourth quarter of 2024. The sharp decline in major semiconductor stocks was the main driver of the drop in the holdings’ market value. The estimated value of the NPS’s stake in SK hynix fell by 74.23 trillion won, while its Samsung Electronics holdings declined by 56.87 trillion won. The combined decrease of 131.10 trillion won accounted for 71.8% of the total decline. Over the same period, Samsung Electronics’ share price fell from 334,000 won to 210,000 won, while SK hynix dropped from 2.65 million won to 1.262 million won. Losses extended beyond semiconductor stocks, with 176 of the 287 companies surveyed recording declines in the value of the NPS’s holdings. These included SK Square, down 10.87 trillion won, and Samsung Electro-Mechanics, down 7.59 trillion won. In contrast, SK Innovation recorded a valuation gain of 904.1 billion won, supported by an increase in the NPS’s stake and a rise in the share price. S-Oil, with a gain of 710.7 billion won, and LG Energy Solution, with 580.8 billion won, also posted increases. The NPS adjusted its portfolio amid the market downturn. It increased its stakes in dividend-paying value stocks, including GS Engineering & Construction, from 7.82% to 12.88%; Hyundai Marine & Fire Insurance, from 9.42% to 12.37%; and Binggrae, from 6.47% to 9.37%. Conversely, it substantially reduced its stakes in Paradise, from 12.33% to 8.39%, and Samsung Biologics, from 10.27% to 6.56%. Notably, the NPS sold down stakes in a number of KOSDAQ-listed companies that it had purchased during the first half of the year, reducing its holdings in 21 KOSDAQ companies in the third quarter. The stakes held by the NPS in 13 companies fell below the 5% threshold, removing them from the list of companies in which it disclosed major shareholdings. These included LG Display, KakaoBank and BNK Financial Group. Meanwhile, 17 companies, including Xi S&D, PharmaResearch and Korea Zinc, newly entered the group of companies in which the NPS held stakes of at least 5%. Following the sharp decline in the value of the holdings, the Korea Shareholder Movement Headquarters, a civic group, filed a complaint with the Corruption Investigation Office for High-ranking Officials on Oct. 19 against President Lee Jae-myung, Health and Welfare Minister Jeong Eun-kyeong and others, accusing them of abuse of authority. The group argues that the NPS’s decision to defer the rebalancing of its domestic equity portfolio in January exacerbated the impact of the subsequent market downturn. The group questioned why rebalancing had been suspended after the president made remarks opposing stock sales during a policy briefing in December 2025. An industry source said pension funds must maintain consistency not only in pursuing returns but also in asset allocation and risk management. While the decline in market value does not represent realized losses from actual stock sales, it has highlighted the vulnerability of a portfolio heavily exposed to semiconductor stocks.