South Korea finance chief defends short-sell ban ahead of elections

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SEOUL — South Korea's finance minister defended the government's ban on short-selling of stocks, an announcement that comes ahead of general elections next year and has drawn criticism from market players who say the move could hurt the country's global credibility.

South Korean Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho takes part in a panel on the third day of the annual meeting of the International Monetary Fund and the World Bank, following last month's deadly earthquake, in Marrakech, Morocco, Oct 11, 2023.

The move, announced ahead of legislative elections in April, has a populist appeal among retail investors as the public sentiment over the practise of selling borrowed shares has generally been negative because it often triggered major price swings. "The move completely thwarted Korea's plans to convince MSCI that it deserves a spot in the developed market status. It came at an odd time too, as the market was recovering, not declining, and we're not in a middle of a crisis either," said Cho Jun-kee, an analyst at SK Securities.

 

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