Foreigners’ attitude shift… Short selling balance significantly reduced

Re-opening, secondary battery share plunged
The transaction amount also decreased by 20% compared to the previous month.

Foreigners’ short selling balances and transaction amounts are declining sharply. There is an atmosphere of collecting short selling mainly on stocks related to re-opening (resuming economic activity), rechargeable batteries, and new and renewable energy. As the stock prices of these stocks have risen sharply recently and are expected to lead the stock market in the second half of the year, it is analyzed that foreigners have started short covering (liquidation of short selling).

According to the Korea Exchange on the 5th, the amount of foreign short selling in the stock market last month (July 5 to August 4) was 5,823.3 billion won. It decreased by 20.89% compared to the previous month’s short selling transaction amount (7.36 trillion won). The proportion of short selling balances to market capitalization rose to a maximum of 10% in the first half of the year, but has recently fallen to the 5% level.

It was one of the stocks with the largest short-selling balance to market capitalization.

In the case of , the proportion a month ago was 7.4%. However, it is now down 1.5 percentage points to 5.9%. Travel companies also declined 0.4 percentage points to 7.8 percent. These are stocks that are considered to be the beneficiaries of the re-opening. The stock prices of two stocks, Hotel Shilla and Lotte Tourism Development, rose 5.22% and 1.69%, respectively, for one month.

Rechargeable battery material entrepreneur

During the same period, the proportion of short-selling balances in silver fell sharply from 7% to 3.4%. During this period, the share price of EcoproBM rose 6.31%. The same is true for the renewable energy sector. Foreigners reduced the proportion of short selling balances of (-0.8 percentage points), (-0.1 percentage points) and solar cell manufacturers (-0.8 percentage points).

To short sell, you must first borrow shares from a brokerage firm. You also have to pay a fee. If the stock price rises, you have to incur a loss in the stock price as well as a fee. So-yeon Park, a researcher at Shinyoung Securities, said, “When the stock price rises, short covering occurs, where stocks are bought to pay off short-sold stocks.

Reporter Sung Sang-hoon [email protected]