Input 2021.01.11 14:10
Individual investors are also burdened with opposition ahead of the April by-election
The Financial Services Commission is expected to extend the deadline for the ban on short selling, which ends in March. Short selling is an investment method that makes a profit by borrowing and selling stocks when the stock price is expected to fall, and then buying and repaying the stocks when the stock price actually falls. It is mainly used by foreigners and institutional investors, and has been pointed out among individuals as the cause of Hara.
The Financial Services Commission banned short selling for six months after the domestic stock market crashed on March 16 last year due to the corona pandemic (a global pandemic). After that, when the corona spread again, the ban was extended by six months and short selling was banned again until March 15th.
Accordingly, the Financial Services Commission initially planned to allow short selling again on March 16. However, recent changes have occurred in the airflow. As the KOSPI exceeded 3000 for the first time in history during the short selling ban period, the claim that the KOSPI index failed to rise due to short selling by foreigners and institutions gained strength.
From the perspective of the Financial Services Commission, if short selling is prematurely resumed and the index falls, the issue of liability may arise. An official from the Financial Services Commission expressed a change of position, saying, “It has not been confirmed whether or not to resume short selling.” In the financial investment industry, there is an expectation that the Financial Services Commission will again extend the deadline for banning short selling.
A high-ranking official in the financial investment industry also said, “Nothing has been officially confirmed yet. “I said.
This position of the FSC is quite far from the existing policy. Earlier, the Financial Services Commission said in’Reference materials related to short selling’ submitted to the National Assembly’s Political Committee in November last year, “We will complete the system supplementation during the period of prohibition of short selling and resume short selling as a rule when the prohibition period ends.”
An official in the financial investment industry said, “If the Korean stock market, which had been ridiculed as the boxpeer, has just surpassed 3,000, it will be an act of putting cold water on the market if the index falls as short selling starts again. I don’t think I can.”
According to the Korea Exchange, 1989 (1015.75) was the year when the KOSPI index exceeded 1000 in terms of market highs. Since then, the KOSPI index has been trapped in the box, crossing the 600-1100 line for 15 years until 2004. The KOSPI index exceeded 1300 (1383.14) in 2005 and exceeded 2000 (2085.45) in 2007, but it has risen and fell within the range of 2000 to 2600 again for 13 years until 2019. However, last year when short selling was banned, it exceeded 2800 (2878.21), and this year it exceeded 3000.
The fact that tens of thousands of individuals want to ban short selling in the face of the April by-election is another reason why the Financial Services Commission cannot easily decide to resume short selling.
On December 31 of last year on the Blue House National Petition bulletin board, I am petitioning for the ban on short selling forever. Look at the stock market now. Is there a problem with the stock market that there is no short sale? 59116 people agreed on the article as of 1 p.m. on the 11th. In the political world, together with Democrats, Hyang-ja Yang and Rep. Park Yong-jin are insisting that short selling should be reconsidered.
An official from the National Assembly’s Political Affairs Committee said, “The mayor of Seoul and the mayor of Busan, etc. are ahead of large-scale by-elections in April, and it will be difficult for the government to allow short selling again, which many individuals are opposing,” right before the election.