S. Korea to partially allow stock short-selling from May
Source: Xinhua | 2021-02-04
South Korea's financial regulator said on Wednesday that it will partially allow stock short-selling from early May to minimize a possible negative impact on the stock market.
The Financial Services Commission (FSC) said in a statement that short-selling will be partially allowed on 350 large stocks composing the KOSPI 200 and the KOSDAQ 150 beginning May 3.
The KOSPI 200 components take up 88 percent of the KOSPI's total market capitalization, while the KOSDAQ 150 elements account for 50 percent of the total, according to the FSC.
The short-selling ban on the remaining stocks will be extended without a specific expiry.
The FSC imposed the short-selling ban on all listed stocks in March last year for six months, and extended it for six more months in a bid to reduce volatility in the domestic stock market caused by the COVID-19 pandemic.
Short-selling refers to the sale of stocks by borrowing them in anticipation of a price fall, before repaying the borrowed shares when the price goes down. It has been seen as one of the main culprits for the stock market rout.
The benchmark KOSPI climbed 1.06 percent to close at 3,129.68. The index hit a record closing high of 3,208.9 last month on expectations for economic recovery.
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