Expected Expansion in National Pension Service Domestic Stock Selling as KOSPI Rises

The securities industry has predicted that if the KOSPI rises sharply, the National Pension Service's selling of domestic stocks could increase. In a recent report, Shin Young Securities analyzed that if the KOSPI exceeds 9,000 points, the National Pension Service may need to sell up to 74.4 trillion won worth of domestic stocks. The report focused on the possibility that the National Pension Service's domestic stock allocation could exceed the allowable ranges for strategic asset allocation (SAA) and tactical asset allocation (TAA). It said that even if the KOSPI rises above 8,500 points, tens of trillions of won in selling could be required if the allowable ranges are not applied, and that selling pressure could grow further if it rises above 9,500 points. However, the actual execution scale and pace of selling were not disclosed, and there has also been speculation that the National Pension Service may adjust its annual, monthly, and daily rebalancing limits to reduce market impact. The report added that such adjustments could have a somewhat positive effect on domestic bond supply and demand in the second half of the year.