Short-Selling 'Tempest in a Teacup'... Trading Volume 'Slows Down'

Short Selling Trading Volume Hits 500 Billion Won
Half of First Day After Resumption
Some Short Selling Targets' Stock Prices Instead Rise

[Asia Economy Reporter Ji Yeon-jin] Short selling transactions are slowing down. The short selling transaction amount, which surged on the 12th when the domestic stock market fluctuated significantly, has decreased significantly over the past five days. In some stocks, despite large-scale short selling attacks, stock prices have rather risen, weakening the influence of short selling.

According to the Korea Exchange Short Selling Portal on the 20th, as of the 18th, the short selling transaction amount for KOSPI and KOSDAQ was 587.8 billion KRW. The short selling transaction amount recorded a maximum of 1.1094 trillion KRW on the first day of resumption, the 3rd, then showed a decreasing trend, but surged again to 984.4 billion KRW on the 12th. However, it has since decreased and stabilized around 500 billion KRW.

The slowdown in short selling transactions is interpreted as individual investors' buying momentum defending against the stock price decline. Individuals net purchased about 5.1707 trillion KRW from the 12th to the 18th. While institutions net purchased only 549.2 billion KRW, foreigners sold as much as 5.1707 trillion KRW. During this period, foreign short selling transaction amounts dropped from 794.6 billion KRW to 509.3 billion KRW.

The fact that stock prices rose despite short selling attacks also seems to have limited short selling transactions. On the 18th, stocks with the highest short selling ratios all saw their prices rise. Hanwha Systems had a short selling ratio of 33.09%, with 3.3 billion KRW in short sales that day, but its stock price rose 1.50%. Hanwha and DB Insurance also rose 1.16% and 2.17%, respectively. Lotte Shopping, which had the highest short selling ratio on the 17th, closed with a 2.18% increase. LG Household & Health Care, which had the highest short selling ratio on the 14th, showed a 0.13% rise. However, Doosan Heavy Industries, which had the highest short selling ratio on the 13th, fell 1.19%. Lee Hyuk-jin, a researcher at Samsung Securities, said, "Stock prices ultimately follow the growth potential of a company's future profits, so if you invested in companies without growth problems, there is no need to fear short selling," adding, "Just as there is no guarantee that a particular investor's buying leads to stock price increases, there is also no basis that short selling necessarily leads to stock price declines."

The fact that stocks heavily hit by short selling showed stock price recovery also seems to have played a role. In fact, large bio stocks, which saw significant price drops on the first day of short selling resumption, have recently recovered. On the 3rd, Celltrion's stock price fell 6.2% from the previous trading day to 249,000 KRW. Since then, Celltrion rose to 272,000 KRW as of the 18th, catching up to the level before partial short selling resumption. During the same period, Celltrion Pharm (068760) rose 6.3%, and Celltrion Healthcare (091990) rose 9.6%. Samsung Biologics' stock price also fell to 773,000 KRW on May 3 but recovered to 894,000 KRW as of the 18th. The rise over fifteen days reached 15.7%.

This content was produced with the assistance of AI translation services.