Short selling balances betting on stock declines reached their highest level of the year. As the KOSPI index continues its so-called 'box formation' trend, the number of investors betting on stock declines is increasing.
According to the Korea Exchange on the 27th, as of the 22nd, the net short selling balance of the KOSPI was recorded at 10.4142 trillion won. This is the highest figure since the complete resumption of short selling on March 31 and also the maximum value for this year.
The net short selling balance has remained above the 10 trillion won level for 13 consecutive trading days since it entered that range on the 5th. The proportion of the short selling balance relative to the KOSPI market capitalization is also around 0.4%, more than double compared to the end of March (0.19%). During the same period, the short selling balance in the KOSDAQ market also more than doubled.
Short selling refers to the act of selling borrowed stocks and then buying them back to return. The increase in net short selling balances suggests that many investors are betting on stock declines.
In the securities market, as of the 22nd, the stock with the highest proportion of net short selling balance relative to market capitalization is HANMI Semiconductor (6.17%). This is followed by ▲SKC (4.59%) ▲Hotel Shilla (4.36%) ▲LG H&H (4.18%) ▲Shinsung ENG (3.46%) ▲Hanwha Solutions (3.18%) ▲Namsun Aluminum (3.09%) ▲SK oceanplant (3.08%).
In the KOSDAQ market, Ecopro (5.36%) leads, followed by ▲Cheryong Electric (5.19%) ▲Enchem (5.17%) ▲Danal (5.15%) ▲DOOSAN TESNA (4.88%) ▲PNT (4.72%), in terms of short selling balance proportion.
Furthermore, the balance of borrowed funds, referred to as the short selling waiting funds, remains at a high level. As of the previous day, the balance stands at approximately 96.485 trillion won, exceeding 90 trillion won since reaching a record high of 98.693 trillion won on the 21st of last month.
Lee Sang-hyun, a researcher at Meritz Securities, noted, 'If the market's upward momentum slows and the upward trend of short selling relative to total transaction volume continues, the probability of increased volatility in individual stocks is high,' adding that 'it is necessary to heighten caution regarding stocks with high short selling balances.'
Meanwhile, although the Korea-U.S. summit has concluded, the specific details of agreements regarding reciprocal tariffs and semiconductor item tariffs have not been disclosed, leaving uncertainty in the market. Additionally, the stocks in shipbuilding, defense, and nuclear power sectors that had driven the market in the first half of the year are not showing strong performance as leading stocks.
Lee Jae-won, a researcher at Shinhan Investment Corp, said, 'The lack of a documented declaration containing the agreements that the market expected indicates that tangible figures such as investment amounts, tariff rates for semiconductor and pharmaceutical items, and specific proposals for nuclear and shipbuilding cooperation are perceived as insufficient and have not contributed to upward momentum.'