Samsung Electronics most courted after ban is lifted

The kingpin of the market Samsung Electronics was the best-selling stock in the South Korean market in the first month of a conditional recovery in short selling, data from the country’s only stock operator showed on Sunday.

The tech giant’s short sale transaction amounted to 611.7 billion won ($ 549.18 million), an average of 34 billion won per day in 18 trading sessions on the day. May 3 through Friday, according to data from the Korea Exchange.

Samsung shares recently traded lower as investor sentiment deteriorated due to shortages in solid-state chips. As a result, large cap stocks lost 1.72% this month.

The main shipping company HMM – formerly Hyundai Merchant Marine – came next with 391.1 billion won in short sales. It was followed by LG Chem and Celltrion at 361.4 billion won and 327.1 billion won, respectively.

In terms of volume of short sales, however, Samsung Heavy Industries came out on top. Investors short sold 19.34 million shares of the shipbuilder during the cited period, while their daily short sale volume reached 1.07 million shares.

Samsung Heavy’s operating losses widened 960% year-on-year to 508.6 billion won in the first quarter due to valuation losses of dollar-denominated assets. As the company looks for ways to improve its financial structure, shares have fallen 21.6% this month.

As of May 3, the country’s financial authorities lifted the ban on short selling the Kospi 200 – the Kospi sub-index representing the 200 largest-cap stocks and 150 companies on the technology-laden Kosdaq market. The ban was imposed to avoid market volatility in the wake of the COVID-19 pandemic in March last year for six months, and has been extended for six months.

Most of the top-selling stocks plunged, but some stocks rose despite the trading strategy. Stock prices of Doosan Heavy Industries & Construction (27.96%) and HMM (26.66%) surged, while Hanwha Life Insurance (12.16%) and Celltrion (2.82%) also jumped.

“Stocks with a limited impact on falling stock prices mean that the high liquidity in the market has covered the amount of massive short selling,” said Jung In-ji, analyst at Yuanta Securities Korea. “The amount of short sales could also be seen as a potential buyout, which could have a positive impact on the market.”

Meanwhile, the country’s key stock index, Kospi, gained 1.3%, while the Kospi 200 edged up 0.85% in the past four weeks. In contrast, the tech-heavy Kosdaq fell 0.61% and its Kosdaq 150 sub-index fell more than 0.94%.

By Jie Ye-eun ([email protected])

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