Bokhyeon Lee “Organising a system within the first quarter of subsequent 12 months”
If 90% blocked, reopen in phases inside the 12 months
Particular person buyers “count on enormous returns once more”
Inventory market: “It will likely be unfavourable information for the revival of the inventory market.”
▲ Key periodicals referring to the ban on brief promoting The potential for a full resumption of brief promoting this 12 months has roughly disappeared. The President’s Workplace set the premise of ‘finishing the system’ as a prerequisite for the resumption of brief promoting, however the heads of the Monetary Supervisory Service and the Korea Trade stated in succession that ‘it can solely be attainable to determine a whole system someday subsequent time. 12 months.’ Plainly ‘ants’ (particular person buyers) welcome this authorities coverage with each palms. The expectation is that there can be one other alternative to make a revenue if the ban on brief promoting, which was thought of the primary explanation for the autumn in inventory costs, continues. Nonetheless, securities and educational circles are involved that it may erode not solely the potential for capital market improvement but additionally the vitality of the inventory market.
Lee Bok-hyeon, head of the Monetary Supervisory Service, stated in a radio present affairs program on the twenty seventh, “We’ve been reviewing methods and expertise preparation plans since November final 12 months, and there’s a plan that’s near the ultimate plan on work for the time being. place.” He added, “It can take in regards to the first quarter of subsequent 12 months to finish the development of the system.” “I feel so,” he stated. It has been 5 days because the President’s Workplace stated, “There can be no resumption of brief promoting except there’s a system in place.” Nonetheless, Director Lee left open the opportunity of a partial resumption inside the 12 months, saying, “If we are able to block 80-90% of unlawful brief promoting by way of the securities firm’s inside management system, we are able to think about whether or not to partially resume.”
At present, monetary authorities and exchanges have established a coverage of creating a two-step inspection course of by establishing a system for detecting unlawful brief promoting orders and a centralized system for all securities firms. Not like the methods for all securities firms, it’s anticipated that it’s going to take a substantial period of time to arrange a centralized system. Beforehand, on the twenty fourth, Korea Trade Chairman Jeong Eun-bo additionally stated, “I feel it can take a couple of 12 months, or 10 months if shortened, to develop a centralized system to manage brief promoting.”
Particular person buyers appear to welcome the extension of the ban on brief promoting. Resulting from brief promoting targeted on international funding banks (IBs), the notion that ‘the home inventory market is a biased enjoying subject’ was frequent amongst particular person buyers. As well as, because the Monetary Supervisory Service’s latest interim announcement of an unlawful short-selling audit revealed the fact of worldwide IB unlawful short-selling value greater than 200 billion received, the complaints of particular person buyers grew even louder. In actual fact, when Director Lee just lately talked about the opportunity of partially resuming brief promoting in June, disgruntled voices erupted, saying, “It’s untimely as unlawful brief promoting continues to be detected.”
Nonetheless, market and educational positions are cautious. To start with, securities firms are apprehensive {that a} lengthy ban on brief promoting won’t solely cut back the vitality of the home inventory market but additionally have a unfavourable influence on inventory costs in the long term. An official within the securities trade stated, “The interval from one other abnormality (whole ban on brief promoting) to normalizing abnormality (unlawful brief promoting) goes too lengthy,” and “The federal government, which emphasised revitalization the inventory market by way of the capital market’s autonomy, is “It is like steady contradictory insurance policies,” he continued, “The extension of the brief promoting ban will naturally act as a unfavourable issue within the inclusion of nations’ indices superior Morgan Stanley Capital Worldwide (MSCI), which Korea has been following for a number of years.” He added, “The drive to incorporate it in MSCI’s developed international locations index is to extend the influx of overseas capital funding. “Moderately, it seems to be stopping the influx of overseas capital by banning brief promoting,” he added.
There are additionally questions from educational circles in regards to the brief sale system itself, which is alleged to take greater than 10 months to finish, even whether it is short-lived. Dong-Hyeon Ahn, professor of economics at Seoul Nationwide College, stated, “It’s questionable how efficient the regulation can be all through the system sooner or later,” and famous, “It is virtually inconceivable to filter out all unlawful brief gross sales. by way of the system within the inventory market, the place there’s a whole lot of brief promoting overseas, particularly by way of international IBs.”
Correspondent Choi Jae-seong
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