S. Korea mulls extending short selling ban

SEOUL, Nov. 30 (Yonhap) -- South Korea's financial watchdog is considering
banning short stock selling longer than expected as the local market remains
volatile despite stabilization measures, officials said Sunday.
In September, the Financial Services Commission (FSC) said it would ban short
selling "for the time being" in an effort to minimize the fallout from
international financial turmoil. The watchdog also said it would raise the daily
limit on share repurchases to 10 percent from the previous 1 percent.
When the ban ends "will depend on when the market stabilizes," an official at the
FSC said, adding that the measure may be in effect until early next year.
Short selling refers to the practice in which investors sell shares by borrowing
them in anticipation of price falls. Short sellers can make profits by buying
back shares at a lower price and then returning them. The practice has been
blamed for amplifying financial market jitters by sparking price falls.
The country's key stock index, the KOSPI, lost almost 40 percent this year as the
global financial rout deepened and foreign investors pulled their money out of
local stocks. The KOSPI closed up 1.18 percent at 1,076.07 points on Friday,
rising for the fourth consecutive session and making its total gains since Monday
11 percent.
sam@yna.co.kr
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