Shares in South Korea surged on Monday morning after the country’s financial regulator issued a blanket ban on short selling to appease retail investors ahead of parliamentary elections next year.
The country’s benchmark Kospi index rose as much as 4 per cent, with battery company LG Energy Solution jumping more than 20 per cent and Posco Future M, a battery materials company, up 28 per cent. The technology-focused Kosdaq index rose as much as 6 per cent.
The ban imposed by the Financial Services Commission will be in place until June 2024 and applies to all listed stocks in South Korea. “Despite previous regulatory improvements, concerns remain high over fair price formation in the domestic stock market due to repeated illegal naked short selling by global institutional investors,” FSC chair Kim Joo-hyun said on Sunday.