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% in 2021, this week bowed to retail investor pressure and extended the ban on the key hedging tool, unsettling institutions.
