South Korean equities have rebounded sharply, but rising short interest and stock lending suggest many investors remain skeptical that the move will last. Net short interest outstanding on the KOSPI reached 19.01 trillion won (approximately $13.5 billion) as of the 11th, up 2.27 trillion won (approximately $1.6 billion), or 14%, from 16.73 trillion won (approximately $11.9 billion) at the end of last month, while KOSDAQ short interest climbed 1.76 trillion won (approximately $1.2 billion), or 32%, to 7.3 trillion won (approximately $5.2 billion) from 5.54 trillion won (approximately $3.9 billion). The KOSPI has risen 6% this month and briefly retook 7,000 intraday on the 14th for the first time in 15 trading sessions, while KOSDAQ is up 20%. Stock lending balances, a common precursor to short selling, also expanded to 170.24 trillion won (approximately $120.6 billion) as of the 13th. Investors appear to be positioning for renewed volatility as concerns persist over a semiconductor peak-out (a downturn after reaching a cyclical top), possible U.S. interest rate hikes and profit-taking after the rally. Still, some brokerages say valuations remain low: Lee Kyung-min, an analyst at Daishin Securities, said the KOSPI's 12-month forward P/E ratio (price-to-earnings multiple) stands at 5.6x, while Lee Jae-won, an analyst at Yuanta Securities, recommended a semiconductor-focused strategy as profit and free cash flow forecasts rise for Samsung Electronics and SK Hynix.