Stock shorting by institutions doubles on month in Sept on bet on Kospi bear

Short sale by institutional investors in Korea doubled on month in September to take up over 33 percent, mostly targeting heavyweights like bellwether Samsung Electronics Co. and online platform giants Kakao Corp. and Naver Corp. as they betted on stock falls in a volatile market.

According to the Korea Exchange on Thursday, institutional investors were behind 33.1 percent of the entire short-selling transactions in the main Kospi bourse as of Sept.29, up 16.5 percentage points from a month ago.

The proportion of stock shorting by foreigners, meanwhile, fell to 64.8 percent from 80 percent in the previous month. Short-selling by retail investors stayed unchanged at around 2 percent.

“Institutions seemed to have opted for short-selling to avoid risks and chase profits by taking advantage of the volatile market in September,” said an analyst at Samsung Securities.

Short position has increased institutional sale to net 3.97 trillion won ($3.35 billion) this month, while etail investors and foreigners net purchased 2.59 trillion won and 1.06 trillion won, respectively.

They net sold over 1 trillion won worth of Samsung Electronics shares. They also dumped shares in platform big names like Naver, Kakao and Kakao Bank on tightened regulation and oversight.

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