President Lee Jae Myung told reporters the run-up had moved too quickly, calling the subsequent pullback inevitable, while saying Korean stocks remain undervalued. Answering a question on losses in the National Pension Service's local equity bucket, he said, "I had been concerned about the rapid pace."
These are his first public comments since the Kospi sank in recent weeks as investors questioned whether the AI-fueled surge could last. The benchmark had neared the psychologically important 5,000 mark that Lee promoted during his 2025 campaign, and then on Monday finished up 1.8% at 5,768.01 after an early drop.
Data provider FnGuide said the slide in Samsung Electronics and SK Hynix, two of the NPS's largest positions, accounted for much of the roughly 182 trillion won, or $137 billion, decline in the pension's estimated domestic equity value in the third quarter.
FnGuide also calculated that, as of Oct. 15, the NPS's positions of at least 5% in 287 companies were worth 333.5 trillion won, versus 515.9 trillion won at end-June. The NPS managed about 1,866 trillion won in total assets as of end-June. The fund had roughly 21 million subscribers in June and was sending pension payments to over 7 million people, highlighting how market moves filter into household finances.
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Lee said the government will keep pushing for better corporate governance and noted his administration is considering additional steps aimed at bringing valuations closer to normal levels. He also cautioned against trying to steer prices, saying direct intervention in financial and stock markets is both hard and undesirable.
That stance tracks with the administration's broader push to lift shareholder returns and fix corporate governance, which helped fuel gains before the recent setback.
Volatility has reminded investors how fast a momentum trade can unwind. The NPS's central role in Korea's retirement system means market moves show up in real-life cash flows, and any policy follow-through on governance could be a medium-term tailwind for valuations. If you hold South Korea via global funds or ETFs, the mix of AI sentiment, NPS positioning, and governance reform remains the trio to watch.
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