The net short selling balance in the market for listed securities (KOSPI) has surpassed 9 trillion won, recording the highest level since the full resumption of short selling transactions.
According to the Korea Exchange on the 13th, as of the 9th, the net short selling balance of KOSPI was recorded at 9 trillion 445 billion won.
This is the largest amount since the resumption of short selling transactions on March 31. The net short selling balance, which was 3 trillion 915.6 billion won at the time, has surged by 131% in just over three months.
The proportion of the net short selling balance in the KOSPI market capitalization increased from 0.19% to 0.35% during the same period.
The net short selling balance in the KOSDAQ market also reached 3 trillion 928.7 billion won as of the 9th, marking the highest level since the resumption of short selling transactions. The proportion compared to the market capitalization increased from 0.52% to 0.96% during the same period.
Short selling is an investment technique where an investor borrows shares, sells them first, and then repurchases them at a lower price when the stock price falls to repay the borrowed shares. An increase in the net short selling balance indicates that there are typically many investors expecting stock prices to decline.
Among KOSPI-listed stocks, SKC, a company specializing in secondary batteries and semiconductor materials, has the largest proportion of net short selling balance relative to its market capitalization. This proportion reaches 5.55%.
Following were HANMI Semiconductor, VT, Hotel Shilla, Dongbang, Doosan Fuel Cell, Hanwha Vision, among others.
In the KOSDAQ market, Cheryong Electric, a transformer manufacturer, had the largest proportion. It was followed by VT, Danal, Jeju Semiconductor, Nature Cell, and Ecopro BM.
An increase in the net short selling balance can be interpreted as a response to the possibility of a correction in the domestic stock market, which has surged steeply in recent times.
The KOSPI index has shown positive revenue results every week for 13 weeks, except for just two weeks since the third week of April (14th-18th) until now.
However, considering the gradual easing of uncertainties related to tariffs from the United States and the revival of global risk appetite, many observers believe there is sufficient potential for further index increases.
As a result, foreigners who had responded with short selling to concerns over tariffs in the Korean stock market are now beginning to engage in short covering, which could lead to an increase in stock prices.
The improvement in fundamental evaluations (corporate strength) for several stocks with a high proportion of short selling balance, such as HANMI Semiconductor, VT, and Hotel Shilla, supports this expectation.
Byun Jun-ho, a researcher at IBK Securities, noted, "The combination of the Bank of Korea's interest rate cuts, the supplementary budget, and government stimulus measures for the stock market has led to stronger expectations than ever for the domestic stock market," adding, "This trend is likely to continue for the second half of the year."