South Korean pension funds net purchased nearly 2.5 trillion won ($2.2 billion) worth of stocks in companies listed on the benchmark Kospi this month as of Tuesday, Korea Exchange data showed Wednesday.

Analysts say the move was fueled mainly by the state-run National Pension Service’s efforts to balance out its investment in domestic stocks in its asset portfolio amid a bear market.

According to the KRX, institutional investors net purchased nearly 2.6 trillion won worth of Kospi shares from Sept. 1 to Tuesday. The pension funds’ investment accounted for more than 90 percent of that amount. 

Foreigners net sold 747.4 billion won worth of Kospi shares in the cited period, and individual investors net sold 1.9 trillion won worth.

The pension funds’ investments focused on index heavyweights including market kingpin Samsung Electronics, chipmaker SK hynix, top automaker Hyundai Motor, biopharmaceutical company Celltrion and shipbuilder Samsung Heavy Industries -- all of which are listed on the Kospi. They have, meanwhile, embarked on a selling spree for shares in firms listed on the secondary, tech-heavy Kosdaq.

Buoyed by investment from pension funds, Kospi recovered the 2,000-point mark earlier this month after struggling to gain ground for months, weighed down by risks stemming from the US-China trade war and by trade tensions between Korea and Japan.

It had extended gains for 13 consecutive days as of Tuesday, but failed to sustain the push on Wednesday, closing nearly 1 percent lower from the previous trading.

“The gains observed in the indexes are due to investments made by the pension funds, rather than a favorable macroeconomy,” said Lee Won, a researcher at Buguk Securities.

“The NPS is purchasing the stocks to increase the ratio of the domestic stocks in its asset portfolio,” he added.

The NPS in May vowed to increase its investment in domestic shares, which currently account for 17 percent of its asset portfolio, to 18 percent. 

By Jung Min-kyung (mkjung@heraldcorp.com)