Samsung Electronics most shorted stock after ban lifts

Market kingpin Samsung Electronics was the most heavily shorted stock in the South Korean market in the first month of a conditional resumption on short selling, data from the nation’s sole bourse operator showed Sunday.

The amount of short sale transactions of the tech giant stood at 611.7 billion won ($549.18 million), an average of 34 billion won per day during 18 trading sessions from May 3 to Friday, according to the Korea Exchange data.

Samsung shares have recently traded bearish, as investors’ sentiment worsened over semiconductor chip shortages. As a result, the top-cap stock lost 1.72 percent this month.

Top shipping company HMM -- formerly Hyundai Merchant Marine -- came next with 391.1 billion-won worth of short selling. It was followed by LG Chem and Celltrion with 361.4 billion won and 327.1 billion won, respectively.

In terms of short sale trading volume, however, Samsung Heavy Industries came in first place. Investors shorted 19.34 million shares of the shipbuilder’s stock over the cited period, while their daily short sale transaction volume marked 1.07 million shares.

Samsung Heavy’s operating losses widened by 960 percent on-year to 508.6 billion won in the first quarter due to evaluation losses of dollar-denominated assets. While the company seeks ways to improve its financial structure, the shares plummeted 21.6 percent this month.

Since May 3, the country’s financial authorities have lifted the short-selling ban on the Kospi 200 -- the Kospi’s subindex representing the 200 largest-cap stocks and 150 companies on the tech-laden Kosdaq market. The ban was imposed to prevent market volatility in the aftermath of the COVID-19 pandemic in March last year for six months, and was extended for another six months.

Most top shorted stocks plunged but some shares advanced despite the trading strategy. The share prices of Doosan Heavy Industries & Construction (27.96 percent) and HMM (26.66 percent) surged, while Hanwha Life Insurance (12.16 percent) and Celltrion (2.82 percent) also jumped.

“Stocks with a limited impact on falling share prices mean that market’s ample liquidity covered the amount of massive short selling,” said Jung In-ji, an analyst at Yuanta Securities Korea. “The amount of short sales could also be seen as potential buy backs, which would possibly bring a positive impact on the market.”

Meanwhile, the nation’s key stock index Kospi gained 1.3 percent, while the Kospi 200 inched up 0.85 percent in the last four weeks. On the contrary, the tech-heavy Kosdaq moved down 0.61 percent and its subindex Kosdaq 150 retreated 0.94 percent.

By Jie Ye-eun (yeeun@heraldcorp.com)