The government is in an escalating dispute with retail investors over the complete resumption of short-selling here.
The controversy centers on whether financial authorities will allow short-selling in the local stock market by May, as the move will help Korea get its name on the Morgan Stanley Capital International (MSCI) watch list in June.
Placement on the watch list is the first step for the stock market to win the much-anticipated “developed market” status from MSCI, possibly as early as 2024.
But retail investors have for years cried foul over the trading practice, strongly denouncing the government’s move to resume the short-selling of Korean shares. Individual investors argue that the short-selling resumption will only benefit institutional and foreign investors due to their dominant market influence here.
For now, the ban on short-selling has only been partially lifted on stocks in the KOSPI 200 and Kosdaq 150.