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Korea Herald
28-05-2025
- Business
- Korea Herald
[Photo News] KB Financial tops value-up push
KB Financial Group Chair Yang Jong-hee (right) poses for a photo with acting Finance Minister Kim Beom-suk during a ceremony marking the first anniversary of the Corporate Value-up Program, held at the Korea Exchange in Yeouido, western Seoul, Tuesday. At the event, 10 best practice companies were recognized for their efforts to enhance market valuation. KB Financial received the top honor, the Deputy Prime Minister's Award. (KB Financial Group)
Korea Herald
19-05-2025
- Business
- Korea Herald
Foreigners return to Kospi on stronger won
Foreign investors, who had been on a massive selling spree, have returned to the South Korean benchmark Kospi, scooping up shares worth 1.5 trillion ($1.07 billion) won this month. According to data provided by the country's main bourse operator, Korea Exchange, offshore investors net bought shares amounting to 1.47 trillion won on the Kospi in May. Outside of May 2, when foreigners offloaded shares worth 167 billion won, they were net buyers on the market for eight consecutive trading days from May 7 to 16. The stock market closed on May 1 and May 3-6 because of public holidays. The buying spree marks a contrast from foreign investors being net sellers on the Kospi for nine straight months since August, offloading a total of 34.15 trillion won. In April, foreign investors dumped shares worth 9.35 trillion won on the bourse, setting a new high on the exodus. The turnaround comes on the back of the won's recent appreciation against the dollar. After weakening to 1,479 won to the US dollar on April 8, the local currency strengthened against the greenback to the 1,400 won level. A stronger won can be appealing for foreign investors to put their money in won-denominated assets, expecting a gain from further appreciation of the won. Chip giant SK hynix was the top-purchased stock for foreign investors this month, as they raked in 1.29 trillion won of shares, followed by energy solutions providers Doosan Enerbility and HD Hyundai Electric at 273 billion won and 147 billion won, respectively. Yet, foreign hands dumped their holdings of tech behemoth Samsung Electronics, net selling shares worth 559 billion won this month. With the sell-off, foreign ownership of Samsung Electronics' shares dropped to 49.7 percent from 56.5 percent in July. 'Foreign investors are continuing the net buying on the back of the improved investor sentiment in the global stock markets,' said analyst Lee Kyung-min at Daishin Securities. 'The anticipation of the won appreciation led to the net buying of foreign investors. The foreigners' move will set the tone for the Kospi's gain.'
Business Times
05-05-2025
- Business
- Business Times
Vietnam's main stock exchange launches long-awaited trading system
[HANOI] Vietnam's Ho Chi Minh Stock Exchange officially launched its new trading system on Monday (May 5), as the country pushes to unlock emerging market status and boost foreign investment. The new system, known as KRX from Korea Exchange, is expected to shorten the settlement cycle and increase trading capacity, according to an earlier statement from the State Securities Commission. 'The new system will establish the foundation for a central clearing counterparty system,' said Nguyen The Minh, head of research at Yuanta Securities Vietnam. Both the MSCI and FTSE indices currently classify Vietnam as a frontier market, which prevents many funds, family offices, and others from investing in companies listed there. FTSE will hold its next regular review in September. Vietnam has been on FTSE's watchlist for a possible upgrade since 2018. Vietnam's benchmark stock index rose slightly on Monday morning, reaching 1,232 as at 0243 GMT. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Last November, Vietnam removed a requirement for overseas investors to fully prefund equity trades, one of the longstanding barriers to its potential upgrade. The KRX had faced multiple delays due to regulatory and technical roadblocks. 'KRX can enhance market liquidity and pave the way for the launch of other new financial products including day trading, short-selling and derivatives, which will better benefit investors,' Minh said. According to Minh, the system has been functioning properly so far, but it may take investors some time to get accustomed to it. REUTERS
Korea Herald
04-05-2025
- Business
- Korea Herald
Short selling turnover decreases one month after resumption
Short selling activity in South Korea has returned to near pre-ban levels about a month after a yearlong suspension was lifted, the bourse operator said Sunday. On March 31, South Korea reinstated short selling for all listed companies, ending a ban that began in November 2023 following revelations of naked short selling violations involving several global investment banks. According to the Korea Exchange, short selling on the main KOSPI and secondary KOSDAQ markets averaged 848.5 billion won per day between March 31 and Friday, totaling 20.4 trillion won. The figure marked a slight rise from the daily average of 788.4 billion won tallied during a month just before the country banned the trading practice. Foreign investors accounted for 85.1 percent of the short selling activity, while institutional investors took up 13.7 percent. Short selling turnover peaked at 1.7 trillion won on the first day of resumption but has since declined steadily, falling to 627.2 billion won as of Friday. (Yonhap)
Business Times
30-04-2025
- Business
- Business Times
Short selling is simply part of normal market functioning
EVERY time stocks plunge as drastically as they did in early April following the announcement of the Trump tariffs, the issue of whether to curb short selling gets revived. On Apr 8, for instance, in response to the US tariff-led pressure, Thailand announced a ban on short selling of stocks and tightened other share trading rules to curb volatility. The ban on short selling of all securities, except for market makers, lasted until Apr 11. Also in early April, Taiwan's Financial Supervisory Commission limited for about one week the number of shares that could be sold short and raised the minimum short selling margin ratio from 90 to 130 per cent. Perhaps the most extreme example of short-selling curbs were to be found in South Korea which, ironically, lifted year-old measures at the end of March only days before the US-led tariff turmoil. This came after Korea Exchange introduced a system that can detect naked short selling, which involves selling stocks without borrowing them and is illegal in South Korea. Fines for illicit profits have also been raised, and enforcement measures have been tightened. A profit of five billion Korean won (US$3.5 million) or more can even result in a prison term between five years and life imprisonment. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Why this worry about an activity that is routine and commonplace in the currency, futures and commodities markets? One is the view that it is morally objectionable to profit from a company's demise or losses by others. Another is that it is somehow wrong to sell something not originally owned so as to make a profit by buying it back after the price has fallen (as in via a naked short). Yet another is that it adds unnecessarily to market volatility. Back in the 1980s and 1990s, there was a belief in Singapore that short selling should be made illegal and banned. Many also felt that short sellers should be severely punished. Regulators here took a more enlightened view and, consistent with how a disclosure-based regime is supposed to work, opted for a prudent middle ground. For example, if a sell on the Singapore Exchange is a short sale, it has to be marked as such and the data on such sales is then compiled and published. As for penalties, this comes via the exchange's buying-in process which kicks in for naked positions that result in failed scrip delivery, a process which can result in painful financial losses if prices had risen in the intervening days. The reality – apart from the fact that regulators should really not be in the business of mandating rules that only push prices in one direction – is that for every objection, there can be an equally plausible counter justification. For example, those who see shorting as aggravating volatility and raising risk should also acknowledge that short sellers actually take on an inordinate amount of risk since their upside is limited while the downside is theoretically unlimited. This is why institutions in Korea welcomed the lifting of the ban. Market analysts saw the resumption of short selling as 'likely to be neutral to positive for the broad market' and to 'improve market efficiency and price discovery, presenting potential alpha opportunities''. This is not to say that short selling should be encouraged or discouraged. But the activity should be recognised as being part of normal market functioning and be treated as such.
