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As Korea Resumes Short-Selling, Stocks That Rose Most Take Hit
May 03 2021, 2:46 PM
May 03 2021, 11:27 AM
May 03 2021, 2:46 PM
(Bloomberg) Investors rushed to sell shares of some Korean biopharmaceutical companies which surged last year as the nation lifted the worldâs longest pandemic-imposed short-selling ban on Monday.
(Bloomberg) Investors rushed to sell shares of some Korean biopharmaceutical companies which surged last year as the nation lifted the worldâs longest pandemic-imposed short-selling ban on Monday.
The health-care sector slumped 4.9%, the biggest loser among Kospi 200âs sub-gauges. The group rallied 67% in 2020, the best performer of all. Drug developer Celltrion Inc. tanked 6.2%. HLB Inc. finished 4.2% lower as investors preemptively sold their holdings in the health-care company, according to Eugene Investment & Securities Co. analyst Han Byung-Hwa.
Synopsis
Korea, whose benchmark surged last year and is up 8 per cent in 2021, this week bowed to retail investor pressure and extended the ban on the key hedging tool, unsettling institutions.
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Traders said that without the benefit of short-selling, they are having to use futures of stocks to hedge their exposure.
A growing number of fund managers and traders are worried that South Korea’s pandemic-imposed ban on short-selling, the world’s longest-such restriction, has artificially propped up the country’s stock market rally.
The decision this week to extend the short-selling ban imposed in March last year to tame pandemic-hit markets until early May will likely backfire, they said. Korea, whose benchmark surged last year and is up 8 per cent in 2021, this week bowed to retail investor pressure and extended the ban on the key hedging tool, unsettling institutions.