Short Selling Pauses... Lowest Trading Volume Recorded Since Resumption

On the 7th, officials from the Citizens' Coalition for Economic Justice in Jongno-gu, Seoul, held a press conference urging the Financial Services Commission to disclose information on illegal short selling and calling for improvements to the short selling system and regulations. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Ji Yeon-jin] The scale of short-selling transactions has significantly decreased. With the KOSPI reaching new highs this month and a bullish atmosphere forming, short-selling appears to be taking a breather.

According to the Korea Exchange on the 15th, the short-selling transaction amount in the KOSPI and KOSDAQ markets yesterday was 345.7 billion KRW, the lowest level since the partial resumption of short-selling on the 3rd of last month. On the first day of resumption, last month on the 3rd, short-selling transactions reached a record high of 1.1009 trillion KRW in a single day. The average daily short-selling transaction amount over the past month was 705.8 billion KRW, but it has sharply decreased to 506.9 billion KRW up to yesterday this month.

The decrease in short-selling transaction amounts is interpreted as a sign that the bullish market is reemerging, with the KOSPI reaching new highs this month. Since short-selling is an investment technique that bets on price declines, losses occur when stock prices rise.

According to a report published by Mirae Asset Securities on the same day, HMM, which had the highest short-selling balance growth rate of 1080.1% last month, saw its stock price rise by 22.2%. Doosan Heavy Industries also jumped by 42.7%. Researcher Shin Sang-beom of Mirae Asset Securities explained, "In the case of Doosan Heavy Industries, 82.2% of the monthly short-selling was accumulated as a balance, and as the stock price surged, additional short-selling was accumulated to raise the selling price."

However, the loan balance, known as the standby fund for short-selling, may continue to increase, suggesting that short-selling transactions could become more active in the future. As of the end of last month, the loan balance based on KOSPI 200 was 842.83 million shares, a 59.5% increase from the previous low point (528.29 million shares on April 2). The record high loan balance was 1.31102 billion shares recorded just before the short-selling ban, and since the balance at the end of last month is 64.3% of the maximum balance, there is room for further increase.

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