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Pension funds draw backlash for selling spree on KOSPI
Posted : 2021-02-19 16:10
Updated : 2021-02-19 17:15
By Park Jae-hyuk
Public pension funds in Korea have enraged domestic retail investors because of their record-long selling spree on the benchmark KOSPI, which is claimed to be one of the main reasons for the recent bearish market.
Such a negative sentiment has sparked an unprecedented inspection by the financial watchdog on their recent stock trading records.
According to the Financial Supervisory Service (FSS), Friday, its securities market team asked major asset management companies entrusted with assets from the National Pension Service (NPS), the Government Employees Pension Service, the Teachers Pension and the Postal Savings & Insurance to submit data on their transactions of local stocks since last November.
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.
3 Min Read
SEOUL (Reuters) - A swarm of online traders in South Korea is taking a leaf from the Reddit horde in the United States to quash a government plan to lift a pandemic-imposed ban on short-selling, triggering a rally in the most shorted-stocks such as Celltrion on Monday.
FILE PHOTO: The logo of Celltrion is seen at company s headquarters in Incheon, South Korea, October 28, 2016. REUTERS/Kim Hong-Ji
Almost 30,000 investors of the Korea Stockholders Alliance have come together at a membership-based forum at naver.com, signing online petitions and staging downtown demonstrations calling for permanent ban on short selling of shares.