Yang Hyang-ja "Short Selling Must Be Concluded Within January... The Key Is to Calm 'Anxiety'"

[Asia Economy Reporter Oh Ju-yeon] "A conclusion must be reached within January. Only then can the market prepare."

Yang Hyang-ja, a Supreme Council Member of the Democratic Party of Korea, said in a phone interview with Asia Economy on the evening of the 20th, "Individual investors who have supported the domestic stock market are expressing extreme anxiety over the issue of the resumption of short selling," adding, "The key is to alleviate this anxiety before deciding whether to extend or lift the ban on short selling."

Regarding the recent sharp rise in the domestic stock market, Yang assessed, "It is because liquidity funds have increased," and added, "Although it appears overheated on the surface, I do not think it is a bubble." She emphasized that individual investors, known as 'Donghak Ants,' have supported the domestic stock market since the outbreak of COVID-19, and that a clear message must be given before March 15, when the short selling ban ends, to avoid market confusion. Yang said, "Since short selling also has positive functions, we are preparing measures such as preventing illegal short selling, improving the market maker system, and expanding accessibility for individual investors." Not only Yang but also many lawmakers within the ruling party are leaning toward extending the short selling ban. Lawmakers Song Young-gil, Woo Sang-ho, and Park Yong-jin are among them.

Short selling is an investment technique where stocks are borrowed and sold even without owning them. Since it involves selling in anticipation of a price drop to make a profit, an increase in short selling of a particular stock can limit further price rises. The current ban on short selling has been temporarily implemented since March last year to reduce market turmoil caused by COVID-19. However, individual investors who supported the market by purchasing 100 trillion won worth of domestic and foreign stocks throughout last year remain sensitive to the resumption of short selling.

On the previous day, Shin Young-dae, a spokesperson for the Democratic Party of Korea, said to reporters at the National Assembly, "The overall party atmosphere is that, from the perspective of market liquidity and protecting individual investors, the majority opinion is to first extend the ban while addressing the harms of short selling and then organize the system."

This content was produced with the assistance of AI translation services.