W 300 Billion Of National Pension Fund To Be Invested Into Share Markets Overseas

As early as September, a maximum amount of 500 billion won of the national pension fund will be invested into the share markets overseas, Korea’s KOSDAQ market, and the venture companies. The government is also considering the investment of the national pension fund in the domestic real estate. The fund has been already invested into the domestic share markets and bonds.

The Ministry of Health and Welfare passed a `plan for the expansion of the target of the fund investment` at a committee meeting for the national pension fund operation. The plan calls for the investment of 300 billion won into the share markets overseas, and the investment of 100 billion won into the KOSDAQ market and the venture companies, respectively. The plan for the investment was made possible due to the law on the national pension fund, revised last December, and the enforcement of the revised law as of July this year.

In terms of investment of the fund into the share markets overseas, the government decided to use the fund from 1.5 trillion won, which was allotted for the current commissioned investment, and to entrust the foreign operation companies to operate under the contract. However, the government plans to invest a minimum amount of fund until next year, and to invest in a full-scale beginning 2003 after the middle evaluation.

The government decided to invest some of the fund from 10.9551 trillion won, which was allotted for the purchase of bonds and the short-term financial goods, into KOSDAQ market and the venture companies.

Meanwhile, as the national pension fund is anticipated to be 75 trillion won at the end of this year and 100 trillion won in July 2003, along with the current fund of 69 trillion won, the government considers a direct or indirect investment into the domestic real estate.

A Ministry of Health and Welfare official said, ``The research center of the National Pension Fund Corporation is examining whether it would be reasonable to invest in the domestic real estate, and the result of the examination will be out at the end of this year.``

Although the current law on the fund management principally bans the investment in real estate to prevent the insolvency of various funds, but with exception, allows the real estate investment in case it has passed the fund operation committee`s review on the annual plan for operation.

yongari@donga.com