How Much Did Stock Drop?
Short selling of Hyundai Motor Group’s stocks has been intensifying, including both Hyundai Motor and Kia Motors. As concerns over performance grow, there are a rising number of investors betting on a decline in stock prices. In contrast, some experts in the securities industry believe that Hyundai and Kia’s growth will continue, and they argue that market concerns are excessive.
According to the Korea Exchange on Aug. 27, short selling transactions of Hyundai Motor Group stocks this month amounted to 134 billion won (US$100.98 million). This marks a significant increase of 133.04 percent compared to last month’s figure of 57.5 billion won from July 1 to 25.
Notably, the proportion of short selling transaction volume accounted for 21.31% of the total on Aug. 23. This represented the first time this year that Hyundai Motor’s short-selling volume exceeded 20 percent. On the following day, Aug. 24, it recorded 17.76 percent, indicating the second-highest short-selling proportion this year.
Kia is in a similar situation. This month, Kia’s short selling transaction volume stood at 162.4 billion won, marking a staggering increase of 291.33 percent compared to last month’s 41.5 billion won. On Aug. 10, the proportion of short selling transactions reached a whopping 33.41 percent, achieving the highest figure of the year.
Hyundai Mobis is also facing a similar situation. Hyundai Mobis has seen short selling transaction proportions exceeding 10 percent for the past three consecutive days, reflecting an overall increase in short selling transactions within the Hyundai Motor Group.
As short selling bets on price declines increase, the stock prices of Hyundai Motor and Kia Motors have shown a sluggish trend. This month, Hyundai Motor’s stock price declined from 196,000 won to 186,200 won, a 5.00 percent decrease, while Kia’s stock dropped from 82,700 won to 78,100 won, showing a 5.56 percent decrease. During the same period, the KOSPI index fell by 4.31 percent, underscoring a market performance below the benchmark.
The surge in short-selling transactions of Hyundai Motor Group is primarily attributed to concerns of a peak-out in performance, a turning point after reaching a peak. The automotive industry’s prosperity is viewed as temporary, and there is an expectation that it will soon come to an end, exerting downward pressure on stock prices. Hyundai and Kia, in particular, have continued their exceptional financial performance, recording record-breaking operating profits in both the first and second quarters of this year.
Despite these concerns, however, securities analysts maintain a positive outlook on Hyundai Motor Group stocks. They argue that concerns over the peak-out are unwarranted, and they expect continued growth in performance. According to financial information provider FnGuide, securities firms have raised their projections for Hyundai Motor’s operating profit this year to 14.62 trillion won, marking a 4.28 percent increase from the figure presented a month ago, which was 14.19 trillion won.