Short Selling Remains a Playground for Foreigners... Major Holders Are All Morgan Stanley and Goldman Sachs

[Asia Economy Reporter Lee Seon-ae] Three months have passed since partial short selling was resumed on May 3rd only for KOSPI 200 and KOSDAQ 150 stocks, yet foreign securities firms continue to dominate the list of large short-selling holders, maintaining their exclusive stage.

According to the Korea Exchange on the 12th, as of the disclosure obligation date on the 9th, the number of large short-selling holders reported in August was 64 cases in the KOSPI market and 156 cases in the KOSDAQ market. Among them, in the KOSPI market, except for one case by Anda Asset Management (stock: Samsung SDI Preferred), 63 reporters were foreign securities firms. In the KOSDAQ market, except for two cases by Hanyang Securities (stock: Jaeyoung Solutek) and Tiger Asset Management Investment Advisory (stock: Cellivery), 154 reporters were foreign securities firms. In both markets, Morgan Stanley International PLC (registered in the UK), Goldman Sachs International (registered in the UK), Merrill Lynch International (registered in the UK), J.P. Morgan Securities Company (registered in the UK), UBS AG (registered in Switzerland), Credit Suisse AG (registered in the UK), and Credit Suisse Securities Europe Ltd (registered in the UK) appeared on the list of reporters.

A large short-selling holder refers to an investor holding short-selling balances amounting to 0.5% or more of the total listed shares of the relevant stock. Reporting large short-selling holders is a mandatory regulation. Short selling is an investment technique where stocks are borrowed and sold when a price decline is expected, and then repurchased at a lower price to gain profit.

In the KOSPI market, the stock with the highest short-selling balance was Lotte Tour Development. The short-selling ratio was 7.25%, and the large short-selling holders were Goldman Sachs International, Morgan Stanley International PLC, and UBS AG. The second was LG Display with a ratio of 6.35%, and the large short-selling holders were Goldman Sachs International, Merrill Lynch International, Morgan Stanley International PLC, and J.P. Morgan. The third was Shinpung Pharmaceutical with a short-selling ratio of 4.43%, and the large short-selling holders were Goldman Sachs International, Morgan Stanley International PLC, and UBS AG. This was followed by HMM (4.04%) and MCNEX (3.74%).

In the KOSDAQ market, the stock with the highest short-selling balance was SillaJen. The short-selling ratio was 7.18%, and the large short-selling holders were Goldman Sachs International, Merrill Lynch International, Morgan Stanley International PLC, Citigroup Global Markets Limited, and Credit Suisse Securities Europe Ltd. The second was KMW with a ratio of 7.10%, and the large short-selling holders were Goldman Sachs International, Merrill Lynch International, Morgan Stanley International PLC, UBS AG, and J.P. Morgan. This was followed by HL Biopharma (6.60%), Seegene (5.26%), and Helixmith (4.39%).

The top short-selling stocks in the KOSPI market (as of August 11) were Hanjin KAL, Kumho Petrochemical, Yuhan Corporation, Meritz Securities, CJ Logistics, NCSoft, Dongseo, BGF Retail, LG Display, and Youngjin Pharmaceutical. The top short-selling stocks in the KOSDAQ market were NICE Information Service, Com2uS, Toptec, GoYoung, KPM Tech, NHN Korea Cyber Payment, Telcon RF Pharmaceutical, GemVax, CJ ENM, and Pearl Abyss.

Individual investors continue to voice dissatisfaction that short selling remains an exclusive domain for foreigners, creating an "uneven playing field." The proportion of short-selling transactions by individuals remains around 1%, while foreigners exceed 70%. The Korea Stock Investors Union stated, "To express opposition to short selling, we plan to conduct a concentrated buying campaign (K-Stop) targeting stocks with the largest short-selling balances."

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