TOKYO Social gaming firms DeNA Co Ltd (2432.T) and Gree Inc (3632.T) are the two most shorted stocks in Japan's Topix 500 index .TOPX500, data provider Markit said, as the two firms face headwinds after rapid growth in recent years.
DeNA has 20.54 percent of its outstanding shares out on loan, while Gree has 16.53 percent, Markit data showed. That compares with an average of 1.1 percent of total shares out on loan in the Topix 500 index.
Shares in DeNA have fallen 27.2 percent so far this year, sharply underperforming a 38 percent rise in the Topix 500. The shares rocketed 93 percent in 2009 and another 59 percent the following year, but are down 52 percent from a record high hit in August 2011.
The stock is likely to come under pressure on Friday after the company reported a 17.4 percent drop in operating profit for the six months ended September to 32.06 billion yen ($323.7 million), slightly below its own guidance of 33.7 billion yen.
Shares of rival Gree have also been battered. The stock is down 39 percent year-to-date after slumping nearly 50 percent in 2012. It jumped 157 percent in 2011.
With both DeNA and Gree shares heavily borrowed, the software sector was the most shorted with an average of 3.3 percent out on loan, Markit said.
Advantest Corp (6857.T), chip-making equipment producer, was the third-most shorted stock, at 10.62 percent of its outstanding shares.
It was followed by Nippon Paper Industries Co Ltd (3863.T) at 10.44 percent, home electronics retailer Yamada Denki Co Ltd (9831.T) at 10.27 percent and Mitsubishi Motors Corp (7211.T) at 9.38 percent.
The semiconductor sector was the second-most shorted, at 2.9 percent, followed by consumer services at 2.2 percent and food retail at 1.7 percent.
Telecom was the least shorted with only 0.2 percent out on loan, Markit data showed.
($1 = 99.0450 Japanese yen)
(Reporting by Dominic Lau; Editing by Stephen Coates)