Short-selling in S. Korea reaches all-time high at $114 bn in 2018

2018.12.31 15:23:19 | 2018.12.31 16:01:18

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Short-selling transactions in South Korea’s stock market have exceeded 100 trillion won ($89.4 billion) for the first time this year as foreign investors went short on Korean stocks.

According to Korea Exchange on Monday, trading value of short-selling transactions reached an all-time high of 128 trillion won this year, up 34.7 percent from a year ago. Short-selling transactions have been on a rise in recent years with total value jumping 9 times this year since the country’s stock operator began compiling related data in 2009.

A total 4.6 billion shares were traded on short-selling scheme this year, up 37.3 percent from a year earlier. Transactions have renewed records every year since 2012.

Short selling is a legitimate investment scheme in which investors borrow shares and sell them immediately on the assumption that share value will go down, which allows them to repurchase the shares at a lower price to make profit on differences.

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This year, short stock sales accounted for 1.59 percent of total trading turnover and 4.57 percent of trading volume.

The biggest short sale target was Korea’s leading biosimilar manufacturer Celltrion Inc. with 12.76 trillion won, followed by Samsung Electronics Co. with 5.84 trillion won, SK Hynix Inc. with 3.93 trillion won, Samsung Electro-Mechanics Co. with 3.14 trillion won, Celltrion Healthcare Co. with 2.8 trillion won, SillaJen Inc. with 2.62 trillion won, Kakao Corp. with 2.22 trillion won, Samsung BioLogics Co. with 2.17 trillion won, Hyundai Engineering & Construction Co. with 1.9 trillion won, and Netmarble Corp. with 1.72 trillion won.

Market analysts noted that a surge in short-selling sales this year came as foreign investors increased their bets that Korean stock market will turn bearish. Foreign investors net sold about 6 trillion won worth of shares in the main Korea Composite Stock Price Index and secondary Korea Securities Dealers Automated Quotation markets this year.

By Moon Il-ho and Lee Eun-joo

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