Korea short-selling hits record high, but top 10 most-shorted stocks all rise

 
South Korea’s stock market rally has pushed past the downward pressure typically associated with short selling. Even as short positions surged during the recent run-up, share prices in heavily shorted names continued to climb.
 
According to the Korea Exchange on the 29th, net short-selling balances stood at 3.05 billion shares as of the 24th, holding near a record high. The balance was 2.95 billion shares on the 22nd, then rose by about 100 million shares in a single day on the 23rd and remained at that level through the 24th. Short-selling balances accounted for 0.47% of listed shares, the highest level since short selling resumed in March last year.
 
Net short-selling balances refer to shares sold short that have not yet been repurchased and returned. A rising balance indicates more investors are positioning for a decline, even as the KOSPI has posted an unusually strong advance.
 
The increase is being viewed as a natural response to the sharp market jump, reflecting both profit-taking short positions and higher hedging demand from institutions and foreign investors. Short selling typically weighs on prices, but recently many of the most-shorted stocks have risen alongside the broader market, suggesting demand has been strong enough to absorb that pressure.
 
All of the top 10 stocks by short-selling value this month (April 1-28) gained. Samsung Electronics, No. 1 at 4.5918 trillion won in short-selling value, rose 17% to 222,000 won from 189,600 won. SK hynix, No. 2, climbed 46% to 1.3 million won from 893,000 won. HD Hyundai Heavy Industries, No. 3, surged about 48% to 667,000 won from 451,500 won even though short sales accounted for 31.3% of trading during the period. Hyundai Motor, No. 4, rose about 14%, and Hanmi Semiconductor gained 34%.
 
Analysts attributed the resilience to strong expectations for earnings improvement across key sectors such as semiconductors, shipbuilding and autos, which helped offset selling pressure. Short covering — buying shares to close short positions — also appeared to amplify gains.
 
The financial investment industry expects solid growth momentum in major sectors to continue. Yang Seung-yoon, a researcher at Eugene Investment & Securities, said HD Hyundai Heavy Industries disclosed a supply contract for land-based power-generation engines for a data center in Texas, adding that “physical systems are not keeping up with the speed of the AI revolution.”
 
Lee Jeong-bin, a researcher at Shinhan Investment Corp., said, “Semiconductors’ 12-month forward operating profit is 599 trillion won, and their share within the KOSPI reaches about 68%,” adding, “It’s not just the direction of profit growth — the level itself has moved higher.” Lee Sang-su, a researcher at iM Securities, said the roadmap that supported higher valuation multiples for domestic automakers — including SDV, autonomous driving and synergy with Boston Dynamics — “remains valid.”