[Anchor]

As the domestic stock market recently experienced a sharp decline, the National Pension Service (NPS), which manages the public retirement fund, has been hit hard. In just three and a half months, the estimated value of its stock holdings plummeted by more than KRW 182 trillion, marking the first decline in seven quarters.

Reporter Kim Hye-min has the details.

[Reporter]

The total stock evaluation value of 287 listed companies in which the National Pension Service held a stake of 5 percent or more as of October 15 stands at KRW 333.5 trillion.

Compared to the KRW 515.9 trillion recorded at the end of June for these same stocks, over KRW 182 trillion has evaporated in just three and a half months.

Viewed on a quarterly basis, this is the first decrease in seven quarters since the fourth quarter of 2024, and the reduction amount is the largest on record.

It has virtually returned most of the gains made during the surge in the first half of this year.

The decrease in the evaluation value of SK Hynix and Samsung Electronics combined accounted for about KRW 131 trillion, making up 72 percent of the total decline.

The National Pension Service has traditionally conducted rebalancing by selling stocks when they were expensive and buying them when they were cheap to adjust its investment ratios.

However, analysis suggests that the National Pension Fund Management Committee temporarily suspended rebalancing last January amid a soaring market and significantly raised its target share for domestic equities in May, ultimately failing to respond to the downturn.

[Professor Seok Byung-hoon / Department of Economics, Ewha Womans University: If the National Pension Service had adhered to the rebalancing principles when stock prices surged, it could have prevented the Kospi from overheating due to excessively rapid price increases. Instead of realizing profits when prices rose, holding onto them and facing massive losses...]

With rebalancing resuming in July, the National Pension Service has instead been offloading stocks during the market downturn.

Pension funds, including the National Pension Service, have maintained a net selling streak since August, and have already sold off nearly KRW 200 billion this month.

[Park Seok-hyun / Researcher, Woori Bank: It is difficult to expect conditions where the pension fund can soon return to buying from a portfolio adjustment perspective. It is unlikely to act as a decisive supply-and-demand turning point.]

Amid a continuous wave of foreign selling in the domestic stock market, retail investors' buying capacity is also diminishing, leading to concerns that the supply-and-demand vacuum could be prolonged as even the National Pension Service fails to serve as a safety net.

(Video Editing: Cho Mu-hwan, Design: Park Chun-woong, Park Tae-young)