[Exclusive] Short Selling Surpasses 100 Trillion Won This Year... 170 Billion Won Bombshell Hits ETFs

Analysis of Cumulative Short Selling Transactions Across All Sectors
Samsung Electronics Short Selling Hits 4.6 Trillion Won This Year, Up 1 Trillion Won from Last Year

Government Allowed Short Selling Only for KOSPI 200 and KOSDAQ 150 Stocks
Last Year, 'KODEX 200 ETF' Short Selling Reached 170 Billion Won
Exchange States "Short Selling Allowed to Provide ETF Liquidity"

[Asia Economy Reporters Ji Yeon-jin and Lee Jung-yoon] It has been analyzed that short selling transactions have exceeded 100 trillion won from the beginning of this year until last month. Cases revealing a lax system were also confirmed, such as large-scale short selling transactions exceeding 100 billion won concentrated in exchange-traded funds (ETFs) where short selling is not allowed.

On the 17th, an analysis of the cumulative short selling transaction status of all KOSPI and KOSDAQ stocks, received from the Korea Exchange in cooperation with the office of Yoon Young-duk, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, showed that from January to September this year, short selling worth 108.8107 trillion won took place in the domestic stock market. Of this, 83.6308 trillion won was in KOSPI and 25.7199 trillion won in KOSDAQ. Compared to last year's short selling transaction amount of 96.9374 trillion won, this is a slight increase, and considering that more than 10 trillion won in short selling occurs every month, the transaction amount is expected to expand significantly this year.

Short selling transaction information is disclosed on the Korea Exchange's short selling portal, but cumulative transaction information is only available for individual stocks. This is the first analysis of cumulative short selling transaction information for all stocks since the Financial Services Commission inspected the partial resumption of short selling in September last year.

Notably, large-scale short selling transactions were confirmed in some stocks where short selling is not permitted. Last year, the 'KODEX 200 ETF' saw short selling worth 175.4 billion won. This stock is an ETF managed by Samsung Asset Management, based on the KOSPI 200 index, which the government did not include in the list of stocks where short selling is allowed. Also, some stocks not included in the KOSPI 200, such as Hana Tour (50.5 billion won), far exceeded the transaction amounts of KOSPI 200 stocks. In the case of last year, the stock with the least short selling in the KOSPI 200 where short selling was allowed was Cuckoo Holdings, recording 5.6 billion won. Short selling on ETFs under regulation was concentrated 31 times more.

The government partially resumed short selling in May last year, allowing it only for KOSPI 200 and KOSDAQ 150. For other stocks, only liquidity providers (LPs) and market makers (MMs) are allowed to short sell, but market makers suspended their operations until August this year in protest against the Financial Supervisory Service's imposition of fines starting from September last year. Given that such large-scale short selling occurs solely through liquidity provision, there are criticisms that short selling may still be possible despite government regulations.

However, a Korea Exchange official explained, "KODEX 200 is the ETF with the largest net asset value among ETFs, so short selling for liquidity provision is possible," adding, "The scale of short selling was large not only last year but also in the past." The short selling of KODEX 200 shrank to about 2.6 billion won this year.

The Korea Exchange stated, "For liquidity providers, short selling carries a stigma due to fees," and "Market inspections confirmed that all 170 billion won of short selling on KODEX 200 were conducted by liquidity providers and market makers." Regarding Hana Tour, it was explained that liquidity providers increased the amount by short selling related stocks to hedge risks while quoting prices for travel-related ETFs.

KOSPI Short Selling Leader Samsung Electronics Increases by 1 Trillion Won

Also, this year, the transaction scale of the largest short selling stocks in both KOSPI and KOSDAQ significantly increased compared to last year. This year, Samsung Electronics' short selling transaction amount increased by more than 1 trillion won from 36.061 trillion won last year. In the KOSDAQ market, short selling was concentrated on secondary battery component stocks such as EcoPro BM and LNDF, with transaction amounts of 2.694 trillion won and 2.1275 trillion won, respectively, marking increases of 78.98% (1.1888 trillion won) and 77.19% (926.8 billion won) compared to last year.

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