The third-largest public pension in the U.S. recently made changes in its biggest investments.
The New York State Common Retirement Fund slashed investments in Chinese online giant
Alibaba Group Holding
(ticker: BABA), apparel maker
Lululemon
Athletica (LULU), and conglomerate General Electric (GE), and increased a stake in chip-making firm
Taiwan Semiconductor Manufacturing
(TSM) in the first quarter. The fund disclosed the stock trades in a form it filed with the Securities and Exchange Commission.
The office of New York State Comptroller Thomas P. DiNapoli, the sole trustee of the pension, declined to comment on the investment changes. At the end of 2022, the pension’s estimated assets stood at $242.3 billion.
Alibaba American depositary receipts had an outstanding first quarter, gaining 16% compared with a 7% rise in the
S&P 500 index.
So far in the second quarter, the ADRs have given all of that back, dropping 15% compared with a flat performance from the index.
Alibaba ADRs actually had a volatile first quarter before ending with a gain for the period. Investors were upbeat on Chinese investments at the start of 2023 because of that country’s reopening after Covid-19 lockdowns ended. In February, the spy-balloon incident and its subsequent fallout sent Alibaba ADRs sliding. When Alibaba co-founder Jack Ma returned to China in late March from abroad, it sparked a rally through the end of the month. But shares slumped again in April on reports Japanese tech investor SoftBank was selling most of its Alibaba stake; SoftBank confirmed in the past week that it was essentially out of Alibaba.
Lululemon stock also rallied in late March, powered by surprisingly strong fiscal-fourth-quarter earnings. The company was reportedly looking in April to sell its Mirror unit, about three years after acquiring the in-home fitness brand.
The pension sold 18,525 Lululemon shares in the first quarter to lower its stake to 146,785 shares.
Lululemon stock rose 14% in the first quarter, and so far in the second, shares are up 3.3%.
GE stock soared 46% in the first quarter, and so far in the second, shares are up 3.3%.
At the beginning of 2023, GE completed the spinoff of
GE HealthCare Technologies
(GEHC). The next major change is when GE separates its power businesses from the aerospace business in early 2024. First-quarter earnings, reported in late April, were strong.
New York’s pension sold 296,400 GE shares to end the first quarter with 2.1 million shares.
The fund bought 264,155 TSMC ADRs to lift its stake to 2.4 million ADRs at the end of March.
The ADRs soared 25% in the first quarter, and so far in the second they are down 10%.
TSMC reported in April a first-quarter-sales miss that might be indicative of the severity of the slowdown in demand for chips. The numbers could even complicate talks for TSMC to invest in U.S. plants.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
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