97% of Short Stock Selling Investors Are Foreign Big Players

The investors in the short stock selling have been unveiled. Foreign financial companies including Morgan Stanley have wiped out the Korean short stock selling market. It draws much attention whether the short stock selling, which was accused of bringing tears to individual small investors by bringing down stock prices, will be subsided through the public disclosure system.

According to the Korea Stock Exchange on July 5, 17 domestic and foreign financial companies announced the massive short stock selling balance of 414 cases (298 items) in both the Korea Composite Stock Price Index (KOSPI) market and the Korea Securities Dealers Automated Quotation (KOSDAQ) market. The investors, who have the short stock selling balance with more than 0.5% of the total listed stocks, are required to make public notice, as the amended Financial Investment Services and Capital Markets Act became effective on July 30.

Foreign financial companies represented 96.6% or 400 cases of the total public notices. In more detail, Morgan Stanley & Co. International announced 248 cases (59.9%), followed by Merrill Lynch International Incorporated with 34 cases, Goldman Sachs International with 28 cases and Deutche Bank AG with 22 cases. By nationality, United Kingdom accounted for 85.7% with 355 cases from the total, followed by Germany and Switzerland representing 24 and 22 cases, respectively. The total 14 cases were announced by domestic financial corporations including NH Investment & Securities Co., Ltd., Samsung Securities Co., Ltd., Shinhan Investment Corp., Meritz Securities Co., Ltd., Dongbu Securities Co., Ltd., eBEST Investment Securities Co., Ltd., Taurus Investment & Securities Co., Ltd., and Mirae Asset Global Investments Co., Ltd, each accounting for 1-2 case(s).

OCI was known to be the company with highest short stock selling balance. Among the total issued 3,849,000 stocks, 11% or 2,843,000 stocks have been or going to be used for the short stock selling. Hotel Shilla (10.59%), Samsung Heavy Industries (9.37%), Celltrion (9.35%), and HyundaiMerchant Marine (6.63%) have also a high balance. The stock exchange internet homepage server stopped owing to the too heavy traffic at 6 pm on July 5, when the public announcement of the short stock selling was posted.