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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] South Korea’s KOSPI continues to post the fastest gains globally, prompting the National Pension Service (NPS) to consider raising its domestic equity investment limit. Without adjusting the allocation, the NPS could be forced to sell stocks.
According to a Maeil Business Newspaper exclusive, the Ministry of Health and Welfare will hold the NPS Fund Management Committee on January 26. This committee reviews and approves asset allocation strategies, and holding an urgent January meeting is the first in five years. Discussions on currency-hedging strategies are also expected.
Under the current plan, the NPS aims to reduce its domestic stock allocation (as a percentage of total assets) to 14.4% by year-end. With strategic asset allocation (SAA ±3 percentage points) and tactical asset allocation (TAA ±2 percentage points) flexibility, domestic stock holdings could reach up to 19.4%. As of the latest data in October 2025, the domestic equity ratio already stood at 17.9%, leaving limited room for further purchases, and the NPS has sold a net 930 billion KRW in domestic stocks so far this year.
Meanwhile, as the stock market rally accelerates, a significant shift from deposits to equities is underway. According to Korea’s five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup), as of January 15, demand deposit balances totaled 643.6 trillion KRW, down about 30.4 trillion KRW from the end of December 2025.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
