www.bloomberg.com
Open in
urlscan Pro
151.101.1.73
Public Scan
Submitted URL: https://r20.rs6.net/tn.jsp?f=0013vC4shkK3AE7W0S8dHAcbJ3KfofXKgqhFfUcraMxchgtKmCOhDikhEyO-3uB9p2yYIHkk7iCxSJbUOSZSWGw...
Effective URL: https://www.bloomberg.com/news/articles/2023-11-06/south-korea-stocks-jump-as-nation-reimposes-ban-on-short-selling?sref=w...
Submission: On November 08 via manual from SG — Scanned from SG
Effective URL: https://www.bloomberg.com/news/articles/2023-11-06/south-korea-stocks-jump-as-nation-reimposes-ban-on-short-selling?sref=w...
Submission: On November 08 via manual from SG — Scanned from SG
Form analysis 1 forms found in the DOM
<form class="Form_form_3-3-3-UvJm- Form_default_3-3-3-tNBTh" data-component="" autocomplete="on">
<div class="sc-ftTHYK drlZRY">
<div color="" class="sc-gswNZR hzlZum">
<div class="sc-dkrFOg dxfenW">
<div class="InputField_inputContainer_3-3-3-dY89a InputField_small_3-3-3-Yy7x- css--input-base email" data-component="email"><label
class="InputField_label_3-3-3-gyVRp InputField_small_3-3-3-Yy7x- InputField_labelShrink_3-3-3-hS2Se InputField_hideLabel_3-3-3-aVi4M email-label-outer InputLabel_label_3-3-3-IjKQP InputLabel_small_3-3-3-W1-gf" data-component="label"
style="--accent-color: currentColor;"><input type="email" aria-required="true" data-component="email" class="InputField_input_3-3-3-trz7A email-input email" id="__Placeholder Value__" name="email" placeholder="Enter your email"
required="" aria-invalid="false" aria-label="email" value="" style="border-color: currentcolor;"><span
class="label email-label InputField_label_3-3-3-gyVRp InputField_small_3-3-3-Yy7x- InputField_labelShrink_3-3-3-hS2Se InputField_hideLabel_3-3-3-aVi4M email-label-outer label-inner">*</span></label></div>
<div class="sc-ftTHYK drlZRY">
<div class="Privacy_wrapper_3-3-3-xY-fK Privacy_tighter-line-height_3-3-3-7MhHR Privacy_single-line_3-3-3-ulcIm single-line sc-pyfCe iReKCT opt-in" data-component="opt-in">
<div data-component="checkbox" class="Privacy_checkbox_3-3-3-SePr4 opt-in"><label class="Checkbox_label_3-3-3-2qQCR Privacy_checkbox_3-3-3-SePr4 opt-in-label InputLabel_label_3-3-3-IjKQP InputLabel_small_3-3-3-W1-gf"
data-component="label" style="--accent-color: currentColor;"><input data-component="opt-in" class="Checkbox_input_3-3-3--ZsIe Checkbox_small_3-3-3-XkaKP Privacy_checkbox_3-3-3-SePr4 opt-in-input opt-in" id="optIn" name="optIn"
type="checkbox" aria-invalid="false" aria-label="optIn" value=""><span class="Checkbox_label_3-3-3-2qQCR Privacy_checkbox_3-3-3-SePr4 opt-in-label label-inner"></span></label></div>
<p>Bloomberg may send me offers and promotions.</p>
</div>
</div>
</div>
<div class="sc-dkrFOg egPFxV"><button type="submit" class="RoundedToggleButton_RoundedToggleButton_3-3-3-jupSn sc-jrcTuL eZxYJG submit" data-component="submit" title="" name="submit" aria-label=""><span
class="Button_wrapper_3-3-3-s5OLy button--inner">
<div class="Button_iconWrapper_3-3-3-QaNRW">
<div class="Button_text_3-3-3-N76nb"><span class="RoundedToggleButton_activeText_3-3-3-BN8uC"><svg class="RoundedToggleButton_icon_3-3-3-aBoTv" width="24" height="24" aria-label="Plus" role="img" viewBox="0 0 24 24" fill="none"
xmlns="http://www.w3.org/2000/svg">
<title>Plus</title>
<path fill-rule="evenodd" clip-rule="evenodd" d="M13 3H11V11H3V13H11V21H13V13H21V11H13V3Z" fill="currentColor"></path>
</svg> Signed Up</span><span class="RoundedToggleButton_inactiveText_3-3-3-oxH0U"><svg class="RoundedToggleButton_icon_3-3-3-aBoTv" width="24" height="24" aria-label="Plus" role="img" viewBox="0 0 24 24" fill="none"
xmlns="http://www.w3.org/2000/svg">
<title>Plus</title>
<path fill-rule="evenodd" clip-rule="evenodd" d="M13 3H11V11H3V13H11V21H13V13H21V11H13V3Z" fill="currentColor"></path>
</svg> Sign Up</span><svg class="RoundedToggleButton_icon_3-3-3-aBoTv" width="24" height="24" aria-label="Plus" role="img" viewBox="0 0 24 24" fill="none" xmlns="http://www.w3.org/2000/svg">
<title>Plus</title>
<path fill-rule="evenodd" clip-rule="evenodd" d="M13 3H11V11H3V13H11V21H13V13H21V11H13V3Z" fill="currentColor"></path>
</svg> Sign Up</div>
</div>
</span></button></div>
</div>
</div>
</form>Text Content
Skip to content
Bloomberg the Company & Its ProductsThe Company & its ProductsBloomberg Terminal
Demo RequestBloomberg Anywhere Remote LoginBloomberg Anywhere LoginBloomberg
Customer SupportCustomer Support
* BLOOMBERG
Connecting decision makers to a dynamic network of information, people and
ideas, Bloomberg quickly and accurately delivers business and financial
information, news and insight around the world
FOR CUSTOMERS
* Bloomberg Anywhere Remote Login
* Software Updates
* Manage Products and Account Information
SUPPORT
Americas+1 212 318 2000
EMEA+44 20 7330 7500
Asia Pacific+65 6212 1000
* COMPANY
* About
* Careers
* Diversity and Inclusion
* Tech At Bloomberg
* Philanthropy
* Sustainability
* Bloomberg London
* Bloomberg Beta
* Gender-Equality Index
COMMUNICATIONS
* Press Announcements
* Press Contacts
FOLLOW
* Facebook
* Instagram
* LinkedIn
* Twitter
* YouTube
* PRODUCTS
* Bloomberg Terminal
* Data
* Trading
* Risk
* Indices
INDUSTRY PRODUCTS
* Bloomberg Law
* Bloomberg Tax
* Bloomberg Government
* BloombergNEF
* MEDIA
* Bloomberg Markets
* Bloomberg Technology
* Bloomberg Pursuits
* Bloomberg Politics
* Bloomberg Opinion
* Bloomberg Businessweek
* Bloomberg Live Conferences
* Bloomberg Radio
* Bloomberg Television
* News Bureaus
MEDIA SERVICES
* Bloomberg Media Distribution
* Advertising
* COMPANY
* About
* Careers
* Diversity and Inclusion
* Tech At Bloomberg
* Philanthropy
* Sustainability
* Bloomberg London
* Bloomberg Beta
* Gender-Equality Index
COMMUNICATIONS
* Press Announcements
* Press Contacts
FOLLOW
* Facebook
* Instagram
* LinkedIn
* Twitter
* YouTube
* PRODUCTS
* Bloomberg Terminal
* Data
* Trading
* Risk
* Indices
INDUSTRY PRODUCTS
* Bloomberg Law
* Bloomberg Tax
* Bloomberg Government
* Bloomberg Environment
* BloombergNEF
* MEDIA
* Bloomberg Markets
* Bloomberg
Technology
* Bloomberg Pursuits
* Bloomberg Politics
* Bloomberg Opinion
* Bloomberg
Businessweek
* Bloomberg Live Conferences
* Bloomberg Radio
* Bloomberg Television
* News Bureaus
MEDIA SERVICES
* Bloomberg Media Distribution
* Advertising
* BLOOMBERG
Connecting decision makers to a dynamic network of information, people and
ideas, Bloomberg quickly and accurately delivers business and financial
information, news and insight around the world
FOR CUSTOMERS
* Bloomberg Anywhere Remote Login
* Software Updates
* Manage Contracts and Orders
SUPPORT
Americas+1 212 318 2000
EMEA+44 20 7330 7500
Asia Pacific+65 6212 1000
US Edition
* UK
* Europe
* US
* Asia
* Middle East
* Africa
* 日本
Sign In
Account
My Interests
* Saved
* My Content
* Newsletters
* Watchlist
Settings
* Account
* Subscription
* Billing
* Help Center
* Sign Out
Subscribe
* Live Now
BLOOMBERG TV+
BLOOMBERG MARKETS ASIA
Bloomberg Markets Asia. Live from Hong Kong, bringing you the most important
global business and breaking markets news information as it happens.
BLOOMBERG RADIO
BLOOMBERG DAYBREAK ASIA
Live market coverage co-anchored from Hong Kong and New York. Overnight on
Wall Street is daytime in Asia. Markets never sleep, and neither does
Bloomberg. Track your investments 24 hours a day, around the clock from
around the world.
Listen
--------------------------------------------------------------------------------
BLOOMBERG ORIGINALS
FUTURE READY WITH EMILY CHANG
Emily Chang brings us into the world of transformative technology that’s
reimagining the way we see the world. We’ll hear from founders, researchers
and scientists on technological innovations that aim to solve some of the
world’s biggest challenges in the hopes of building a better future.
ALSO STREAMING ON YOUR TV:
* * Markets
Markets
* Deals
* Odd Lots
* The FIX | Fixed Income
* ETFs
* FX
* Factor Investing
* Alternative Investing
* Economic Calendar
* Markets Magazine
* UK Markets Today
MARKETS
China’s Oil Demand Outlook Is Worsening as Winter Approaches
MARKETS
China Is Having a Hard Time Wooing Foreign Investors Back
MARKET DATA
* Stocks
* Commodities
* Rates & Bonds
* Currencies
* Futures
* Sectors
View More Markets
* Economics
Economics
* Indicators
* Central Banks
* Jobs
* Trade
* Tax & Spend
* Inflation & Prices
ECONOMICS
UK Risks ‘Decade in the Doldrums’ Without Investment, Think Tank Warns
CHECKOUT
Brits to Pile on Christmas Debt With Buy Now Pay Later Deals
NEW ECONOMY
A World Made of BRICS
View More Economics
* Industries
Industries
* Consumer
* Energy
* Entertainment
* Finance
* Health
* Legal
* Real Estate
* Telecom
* Transportation
* Travel
TECHNOLOGY
EBay Projects Holiday Revenue That Falls Short of Estimates
TECHNOLOGY
Google Reduced Revenue Share Payments to Verizon, Executive Says
FEATURED
* Business of Sports
View More Industries
* Tech
Tech
* AI
* Big Tech
* Cybersecurity
* Startups
TECHNOLOGY
Virgin Galactic Cuts Jobs, Costs on Funding Constraints
SCREENTIME
Nintendo Stocks Jump as It Plans Live-Action Legend of Zelda Movie
TECHNOLOGY
Nationwide Outage in Australia Leaves Millions Without Phone, Internet
Access
View More Tech
* AI
AI
* Stocks to Watch
* Startups & Investing
* Ethics, Law & Policy
* Jobs & Economy
AI
Andreessen Horowitz Co-Leads $60 Million AI Fintech Investment
TECHNOLOGY
MySpace Co-Founder DeWolfe’s New Firm Uses AI to Create Videos
TECHNOLOGY
China AI Chipmaker Moore Threads Cuts Jobs After US Blacklisting
View More AI
* Politics
Politics
* US
* UK
* Americas
* Europe
* Asia
* Middle East
POLITICS
Ohio Abortion Rights Measure Passes, Previewing 2024 Elections
POLITICS
Saudi Minister Says Israel Talks Hinge on Palestinian Question
FEATURED
* Next China
View More Politics
* Wealth
Wealth
* Investing
* Living
* Opinion & Advice
* Savings & Retirement
* Taxes
* Reinvention
WEALTH
World’s Rich Favor Deals Access to Build Global Ties, HSBC Says
WEALTH
Texas Billionaire Sees Real Estate Bargains as ‘Debt Wall’ Looms
FEATURED
* How to Invest
View More Wealth
* Pursuits
Pursuits
* Travel
* Autos
* Homes
* Living
* Culture
* Style
PURSUITS
California unveils Native American monument at Capitol, replacing
missionary statue toppled in 2020
PURSUITS
Blue diamond sells for more than $44 million at Christie's auction in
Geneva
FEATURED
* Screentime
* New York Property Prices
* Where to Go in 2023
View More Pursuits
* Opinion
Opinion
* Business
* Finance
* Economics
* Markets
* Politics & Policy
* Technology & Ideas
* Editorials
* Letters
JESSICA KARL | COLUMNIST
Climate Change Is About to Make Your Commute Even Worse
HAL BRANDS | COLUMNIST
A Rusting Shipwreck Becomes a Flashpoint in the South China Sea
DAVID FICKLING | COLUMNIST
Lithium’s Promised Land Looks More Like the Old Country
View More Opinion
* Businessweek
Businessweek
* The Bloomberg 50
* Best B-Schools
* Small Business Survival Guide
* 50 Companies to Watch
* Good Business
* Subscribe to the Magazine
ELON, INC.
Musk’s Neuralink Wants to Put a Chip In Someone’s Brain
ELON, INC.
The First Glimpse Into Musk’s AI Company
SCREENTIME
Marvel’s Latest Movie Will Show If Superheroes Ever Get Tired
View More Businessweek
* Equality
Equality
* Corporate Leadership
* Capital
* Society
* Solutions
EQUALITY
Wharton Dean Sees Need to Fix UPenn Donor Backlash in Antisemitism Turmoil
EQUALITY
Gun Ban in Domestic-Violence Case Gets Supreme Court Support
FEATURED
* In Trust Podcast
View More Equality
* Green
Green
* New Energy
* ESG Investing
* Weather & Science
* Climate Politics
* Greener Living
* Cleaner Tech
GREEN
LNG Demand to Keep Rising on Asia’s Energy Growth, Woodside Says
GREEN
‘ESG’ Is Too Important to Ax, Investors Say
FEATURED
* Data Dash
* Hyperdrive
View More Green
* CityLab
CityLab
* Design
* Culture
* Transportation
* Economy
* Environment
* Housing
* Justice
* Government
* Technology
TRANSPORTATION
The Most Dangerous Spots for Cyclists in London
TRANSPORTATION
Free Bus Rides Offer Indian Women New Option for Work, and Play
ENVIRONMENT
A ‘Ghost River’ Is Unearthed in Baltimore
View More CityLab
* Crypto
Crypto
* Decentralized Finance
* NFTs
* Regulation
* Technology
CRYPTO
Ex-Cantor Executives Start Lending Platform for Anticipated Spot Bitcoin
ETFs
CRYPTO
Bitcoin Miners Sold More Tokens Than They Minted During October’s Crypto
Rally
CRYPTO
Fed’s Barr Sees Stability Risk in Private Crypto Stablecoins
View More Crypto
* More
--------------------------------------------------------------------------------
Video Player is loading.
Play Video
Pause
Unmute
Current Time 0:00
/
Duration 0:00
Loaded: 0%
0:00
Progress: 0%
Stream Type LIVE
Remaining Time -0:00
Playback Rate
1x
Chapters
* Chapters
Captions
* captions settings, opens captions settings dialog
* captions off, selected
Fullscreen
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaque
Font Size50%75%100%125%150%175%200%300%400%Text Edge
StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional
Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall
Caps
Reset restore all settings to the default valuesDone
Close Modal Dialog
End of dialog window.
Play Again
LIVE NOW
Bloomberg New Economy Forum: Leaders Discuss China, AI and New World Order Watch
Markets
SHORT-SELLING BAN SPARKS BIGGEST RALLY IN KOREAN STOCKS SINCE 2020
* Kospi surges 5.7%, boosted by shorted stocks like LG Energy
* Ban ‘unusual’ in absence of a financial crisis: Eugene’s Huh
FacebookTwitterLinkedInEmailLink
Gift
FacebookTwitterLinkedInEmailLink
GiftGift this article
Have a confidential tip for our reporters? Get in Touch
Before it’s here, it’s on the Bloomberg Terminal
Bloomberg Terminal LEARN MORE
FacebookTwitterLinkedInEmailLink
Gift
By Youkyung Lee
November 6, 2023 at 8:05 AM GMT+8
Updated on
November 6, 2023 at 3:00 PM GMT+8
BookmarkSave
Listen
5:24
South Korean stocks soared after the country reimposed a full ban on
short-selling, a controversial move that regulators said was needed to stop the
illegal use of a trading tactic deployed regularly by hedge funds and other
investors around the world.
The nearly eight-month ban may help appease retail investors who have complained
about the impact of shorting — the selling of borrowed shares by institutional
investors — ahead of elections in April, several market watchers said. However,
it could deter participation by foreign funds in the $1.7 trillion equity market
and complicate Korea’s bid to seek a developed-market status in MSCI Inc.’s
indexes.
The Kospi ended the day up 5.7% to cap its biggest gain since March 2020 amid a
surge in trading volumes. Overseas investors were big buyers on a net basis,
indicating that funds were covering short positions. Stocks that had recently
witnessed an increase in short selling — including LG Energy Solution Ltd. and
Posco Future M Co. — were among the biggest contributors to the benchmark’s
advance. The small-cap Kosdaq Index jumped 7.3%.
READ: Korea Shorting Ban to Hurt Its Developed Market Aim: Street WrapBloomberg
Terminal
Expand
The Financial Services Commission said on Sunday that new short-selling
positions will be prohibited for equities on the Kospi 200 Index and Kosdaq 150
Index from Monday through the end of June 2024. The decision doesn’t
impactBloomberg Terminal existing positions. While pandemic-era curbs on the
practice had been lifted for those two gauges in May 2021, the ban had remained
in place for some 2,000 stocks.
“This policy reversal with respect to short selling is unwarranted at the
current time,” said Wongmo Kang, an analyst at Exome Asset Management. “Many
people view it as a political move aimed at next year’s general election,” he
said, adding that the Korean market tends to be “heavily influenced by retail
investors.”
Get the Bloomberg Surveillance newsletter.
Get the Bloomberg Surveillance newsletter.
Get the Bloomberg Surveillance newsletter.
Make sense of the markets and catch the best on-air moments.
Make sense of the markets and catch the best on-air moments.
Make sense of the markets and catch the best on-air moments.
*
Bloomberg may send me offers and promotions.
Plus Signed UpPlus Sign UpPlus Sign Up
By submitting my information, I agree to the Privacy Policy and
Terms of Service.
South Korea is set to conduct general elections for the National Assembly in
April and public perception of short-selling remains deeply negative in the
nation. Some ruling party lawmakers had urged the government to temporarily end
stock short-selling in response to demands by retail investors, who have staged
protests against the tactic from time to time and also made sporadic coordinated
attempts to drive gains in stocks targeted by short sellers.
Most short-selling in South Korea is conducted by institutional investors.
However, it accounts for a tiny portion of the market — about 0.6% of the
Kospi’s market value and 1.6% of the Kosdaq’s, according to exchange data.
NAKED SHORTS
Lee Bokhyun, governor of the Financial Supervisory Service, refuted the view
that the ban was politically motivated, adding that the suspension was necessary
to protect retail investors and improve the short-selling mechanism. The ban was
“inevitable to introduce an advanced short-selling system,” he was cited as
saying by Yonhap Infomax.
Sunday’s announcement comes just days after the financial watchdog said it plans
a comprehensive probe into short-selling trades by global investment banks, with
a view to root out the practice of naked short-selling, which is illegal in
South Korea. Earlier in October, the FSS proposed the imposition of record fines
on two global banks for “routinely and intentionally” engaging in naked
short-selling.
The so-called naked variety of the trade involves shorting shares without
borrowing them first.
READ: Korea to Fine Banks for Naked Shorts; Local Media Name HSBC, BNP
The Kospi surged earlier this year on frenzied buying of electric-vehicle
battery names and chip stocks related to the artificial intelligence theme.
Concerns over geopolitical tensions and high interest rates reversed the rally
in recent months, driving the benchmark into a technical correctionBloomberg
Terminal and nearly erasing its gain for the year.
The gauge is currently up almost 12% in 2023 versus a 2.6% advance in the
broader MSCI Asia Pacific Index. On Monday, the Kospi’s trading volume was 70%
higher than the average over the past 10 sessions, according to NH Investment.
The latest ban is “unusual” as authorities are comprehensively prohibiting short
selling at a time when there is no major external risk, said Huh Jae-Hwan, an
analyst at Eugene Investment & Securities. South Korea had banned short selling
during the Global Financial Crisis in 2008, amid the euro-zone debt crisis and
the US sovereign downgrade in 2011, and then again during the start of the
pandemic in 2020.
Expand
While regulators argue that naked short-selling inhibits fair price formation
and hurts confidence, some observers say broad outright bans make the market
less transparent and therefore less attractive. Some also say the restrictions
may keep the market from being upgraded in MSCI indexes.
“It does compromise their status and certainly would hold them back from
achieving developed market status,” said Gary Dugan, chief investment officer at
Dalma Capital Management Ltd. “Given that there is an immediate ban there will
be an initial sharp move higher in stock prices of companies that have had some
short selling,” but the impact may be limited given low levels of short
positions in the overall market, he said.
A spokeswoman for MSCI said the index provider does not comment on potential
future reclassifications. South Korea needs to take the politically sensitive
step of fully lifting curbs on stock short selling to ensure inclusion in a key
global index, the head of the country’s securities exchange said in an interview
earlier this year.
“There is a possibility that international investors may lose trust and
opportunity in the Korean market,” Exome Asset’s Kang said. “Without the ability
for investors to express a view that markets and individual stocks are
‘mispriced’ to the upside, stock markets lose long term credibility on the world
stage.”
Read more about Korea’s stock market:Korea Plans Wider Probe Into Stock
Short-Selling by Global BanksChina Rout Set to Roil $71 Billion Korea Market for
Exotic NotesKorea’s Small-Cap Kosdaq Enters Bear Market on EV Battery
SlideBloomberg Terminal
— With assistance from Abhishek Vishnoi
(Updates throughout. An earlier version of this story was corrected to show the
ban was partially lifted in May 2021.)
LinkCopy Link
Follow all new stories by Youkyung Lee
Plus FollowingPlus Get AlertsPlus Get Alerts
Twitter
FacebookTwitterLinkedInEmailLink
Gift
BookmarkSave
Have a confidential tip for our reporters? Get in Touch
Before it’s here, it’s on the Bloomberg Terminal
Bloomberg Terminal LEARN MORE
Terms of ServiceDo Not Sell or Share My Personal InformationTrademarksPrivacy
Policy©2023 Bloomberg L.P. All Rights Reserved.
CareersMade in NYCAdvertiseAd ChoicesHelp
Get unlimited access today.Explore Offer Arrow Right
Chevron Down
Subscribe now for unlimited access to Bloomberg.com and the Bloomberg app
Global news that uncovers a new tomorrow. Cancel anytime.
Get uninterrupted access to global news. Cancel anytime.
Claim This Offer