Research — Aug 21, 2026

Korean short interest broadens beyond index leaders

Securities lending data show a brief rise in large-cap borrowing alongside a more persistent increase across the broader Korean equity market.

Korea’s securities lending market shows a clear split between the KOSPI50, which captures the country’s largest and most liquid index names, and KR Equity (Others), a broader group of Korean-listed equities outside the KOSPI50. Borrowing in KOSPI50 shares increased around the late-July market dislocation before easing, while lending exposure across KR Equity (Others) continued to rise.

As of 17 August, securities on loan represented 0.87% of market capitalization for the KOSPI50 group, compared with 2.64% for KR Equity (Others), leaving a gap of 1.8 percentage points. The KR Equity (Others) reading had increased from 1.90% at the start of 2026, a rise of 0.74 percentage points, or 38.7%. By contrast, the large-cap KOSPI50 move was more short-lived. KOSPI50 securities on loan began the year at 0.88%, fell to 0.67% on 25 June, and rose to a peak of 0.96% on 29 July. The late-July peak coincided with a sharp reversal in Korean equity valuations. The KOSPI fell 10.84% on 28 July and was down 28.9% for the month, amid concerns around Chinese memory-chip competition affecting companies such as Samsung Electronics and SK Hynix.

Market conditions also contributed to the increase in borrowing activity. KOSPI volatility had reached 61% by 20 July, compared with 50% for Bitcoin, while the Korea Exchange had triggered 40 sidecars (temporary trading curbs used to slow programme-trading activity during sharp market moves) and seven circuit breakers during 2026 by that point. Leveraged exchange-traded funds and the semiconductor stocks they tracked accounted for more than 70% of daily trading volume.

Securities on loan is not the same as published short interest or executed short-sale volume, as borrowed stock can also be used for hedging, market-making and settlement activity. Even so, the timing provides useful context: KOSPI50 borrowing activity rose around the semiconductor-led market adjustment and then declined, while KR Equity (Others) activity continued to show more sustained stock-specific borrow demand throughout the same period.

Top 20 revenue-generating Korean equities in July 2026

July securities lending revenue showed a similar split. The 20 leading Korean revenue-generating equities produced $40.17 million during the month, with KR Equity (Others) accounting for $23.56 million, or 58.6% of the total, and KOSPI50 names generating $16.61 million. The top five securities generated 56.4% of the top-20 total: Apr Co led with $6.70 million, followed by HD Hyundai Heavy Industries with $6.09 million, Hanmi Semiconductor with $3.61 million, Samyang Foods with $3.54 million and LG Energy Solution with $2.70 million.

Capital-goods companies generated $16.49 million of July top-20 revenue, equal to 41.1%, while semiconductor and semiconductor-equipment companies generated $5.91 million, or 14.7%. Shipbuilding, batteries, robotics, construction and consumer names also featured in the table, showing that revenue was spread across several areas of the Korean market rather than concentrated solely in the largest technology stocks.

By early August, volatility had eased but remained elevated. The VKOSPI, which tracks expected volatility in the KOSPI 200 options market, fell from around 93 intraday on 29 July to 75.59, while the KOSPI declined 5.1% in the week to 7 August, as the KOSDAQ, Korea’s growth-oriented secondary equity market, gained 10.98%. Over the same period, the KR Equity (Others) securities lending short interest measure, expressed as percentage of market capitalization on loan, continued to rise.

Overall, the data show two separate trends. KOSPI50 borrowing rose around the semiconductor-led sell-off and then returned closer to its earlier range. KR Equity (Others) lending exposure and revenue remained higher, indicating a broader layer of stock-specific borrow demand beneath the headline index moves.