By Lee Kyung-min
The U.S. GameStop saga is unlikely to materialize in Korea, due largely to a tighter financial market system where small retail investors have limited influence in spiking up share prices through short-selling, according to market watchers, Wednesday.
The much-politicized investment method is widely used by foreign and institutional investors seeking profit after selling borrowed shares at a lower price in a bear market at the expense of retail investors.
Melvin Capital Management, a New York-based hedge fund that bet against the American consumer electronics and gaming merchandise retailer, lost over half its assets after the shares skyrocketed 2,000 percent in January, driven by organized purchases from small retail investors seeking to dry up short-selling funds. The firm s assets dipped to $8 billion as of January, from $12.5 billion in early 2000.
Posted : 2021-02-01 16:15
Updated : 2021-02-02 09:13
Financial Services Commission Chairman Eun Sung-soo, second from right, fixes his gaze at Anti-Corruption and Civil Rights Commission Chairperson Jeon Hyun-heui during National Policy Committee meeting at the National Assembly on Yeouido, Seoul, Jan. 29. Yonhap
Over 60 % retail investors oppose resumption of short selling
By Lee Kyung-min
The government is expected to extend its short-selling ban for another three months until mid-June, in a move to placate retail investors seeking collective action against what they consider an extremely uneven playing field on the stock market, according to multiple sources, Monday.
The much-politicized financial investment method is being widely used by foreign and institutional investors to make profits after selling borrowed shares at a lowered price in a bear market at the expense of retail investors.
Posted : 2021-01-28 14:12
Updated : 2021-01-28 17:54
Deputy Prime Minister and Finance Minister Hong Nam-ki, left, attends an online meeting with Andreas Bauer, assistant director of the Asia and Pacific Department of the International Monetary Fund, at Government Complex Seoul, Wednesday. Courtesy of the Ministry of Economy and Finance
By Lee Kyung-min
The International Monetary Fund (IMF) has recommended the resumption of short-selling in Korea, Thursday, escalating an ongoing debate over the much-politicized issue ahead of by-elections in April.
Retail investors in Korea have been calling on the government to retain a ban on short-selling, imposed in March of 2020 to curb speculative trading amid a widening fallout from the COVID-19 pandemic. They fear that share prices could plunge upon the resumption of the investment method used by institutional and foreign investors to profit after selling borrowed shares at low prices in a bear market.
Posted : 2021-01-27 16:31
Updated : 2021-01-27 20:43
Members of the Korea Stockholders Alliance hold a rally in front of Government Complex Seoul, Wednesday, to call for a complete ban on stock short-selling. / Yonhap
By Park Jae-hyuk
Mirae Asset Daewoo, Samsung Securities and Korea Investment & Securities are considering giving retail investors wider access to short-selling by lending them stocks for the investment method that bets on the price fall of the borrowed shares, according to industry sources, Wednesday.
Short-selling refers to a method in which an investor sells borrowed shares in the belief that the price will fall and they will be able to buy the shares back at a discount, keeping the difference and returning the borrowed shares.