SEOUL: Global funds have piled back into short selling South Korean stocks in the two weeks since authorities lifted a ban on the divisive investment strategy.
While the benchmark Kospi Index has held up amid a decline in regional peers during this period, pain has been felt in Korean stocks favoured by the nation’s legions of retail traders. Short selling has been most evident in healthcare and technology stocks popular with mom-and-pop investors, as well as shares of companies that missed inclusion in MSCI Inc’s indexes. With overseas funds betting against 6.1 trillion won (US$5.4bil or RM22bil) worth of Korean stocks over the period, there has been a net outflow of money abroad from the country’s share market.