Financial Services Commission’s “Resume in March as expected” position announcement
Strong opposition such as politics… subtracting one foot from the government
If the ruling party pushes it, it is inevitable to surrender again.
On the afternoon of the 12th, when KOSPI finished trading at 3,125.95, down 22.50 points (0.71%) from the previous trading day, a dealer is heading for a seat in the dealing room of Hana Bank in Jung-gu, Seoul.
As the KOSPI settles in the ‘3,000 Era’ earlier than expected this year, controversy is heating up again over the resumption of the short sale approaching March. Recently, the financial authorities made a relatively clear intention to resume, saying, “There is no extension of the ban,” two months or so before the resumption. Last year, the ban on short selling was extended once, and it took a step back from the strong breath of Donghak ants, but this time, it was strengthened by the position that reopening is inevitable.
However, as individual investors as well as politicians conscious of their opposition, the situation became unknown as they urged the ban on short selling again. This is because there is no possibility that short selling or resuming braking will occur if the politicians, who have to hold their votes ahead of the coming April by-elections, raise their voices of “opposite”. As the actual public opinion and political movements were not serious, the financial authorities seemed to take a step out, saying, “We are pushing to resume short selling, but nothing has been decided yet.”
Government’s “Resume Short Sale” stance
The Financial Services Commission said on the 11th that “the temporary ban on short selling is scheduled to end on March 15,” and said, “We will finish improving the system with the aim of resuming short selling.” Two months before the resumption of short selling, it is interpreted that when short selling became a political issue, both inside and outside the politics, “the ban should be extended”.
When the government announced its policy to resume short selling relatively clearly, the politicians strongly opposed it.
On the 12th, Democratic Party lawmaker Park Yong-jin posted a post on Facebook titled, “The Financial Services Commission answers the administration because it demands fairness.” He raised his voice.
Together with Hyang-ja Yang, the top member of the Democratic Party raised Donghak ants as’patriots’. In an interview with YTN Radio on the same day, Yang said in an interview with YTN Radio, “People’s purchase of Samsung Electronics stocks is an example that shows that there is patriotism in the capital market.”
After the announcement of the government policy, the backlash from individual investors is also increasing. One individual investor said, “Kospi’s stepping on the 3,000 line has a great effect on the ban on short selling.” said.
Subtle change in government position…Resume short selling in March
As politics and public opinion strongly opposed the government’s policy to resume short selling, the question of whether to resume short selling in March, considered a major bad news in the stock market, is falling into the fog again.
The government, which clearly stated its intention to resume short selling the day before, also expressed a position that “nothing has been decided yet,” as if conscious of public opinion and politics.
An official from the Financial Services Commission said, “The government’s basic policy is to resume short selling.
Political circles and officials believe that if the ruling party, which is about to be re-elected, strongly pressures the Financial Services Commission, conscious of public opinion, the government will have to shake the white flag of “prohibiting the resumption of short selling” again. In fact, even last year, the government has been criticized for failing to adhere to the existing principles by easing the standard for large shareholders and the stock transfer tax due to the pressure from the ruling party pushed by public opinion.
However, among experts there are voices saying,’I don’t know when the time will be, but it is inevitable to resume short selling.’ As the recent stock price has entered a short-term overheating period, it is the time when the function of short selling is necessary to suppress bubble (bubble).
Hwang Se-woon, a research fellow at the Capital Markets Research Institute, said, “It is highly likely that the current stock market has entered an overheating phase, so it is important to have an adjustment period through resumption of short selling.” He pointed out that there is a need for short selling to block bubbles in advance.
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