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亚马逊云账号(www.2km.me)_Is short selling a fair game?

admin2021-10-1020

亚马逊云账号

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Ng Zhu Hann: In fact, (Korean) retail investors are adamant the fault rest squarely on short sellers that it is fast becoming a political consideration with South Korean’s 2022 election only six months away.

RECENTLY in South Korea, retail investors banded together to lodge their protest against the short sellers of Samsung Electronics Co Ltd stock.

A bus wrapped in a banner calling for the abolishment of short selling in the centre of Seoul has become an icon of the movement to capture the attention of regulators.

This is just merely five months after the world’s longest short-selling ban (14-month ban) was lifted on May 4, 2021. Samsung’s share price has fallen year-to-date by around 13% but from the peak of 96,800 won (RM340.50), it has plunged close to 26% to 72,200 won (RM253.96).

What upset the retail investors is the constant shorting of the stock by local institutions and more so foreign funds in spite of a narrative on the global shortage of semiconductor.CLICK TO ENLARGE

This is especially apparent where semiconductor giants’ share price such as AMD Inc, Nvidia Corp and Broadcom Inc in developed countries are outperformers of the respective index for 2021 but not South Korea.

In fact, retail investors are adamant the fault rest squarely on short sellers that it is fast becoming a political consideration with South Korean’s 2022 election only six months away.

Their stock market is not that different from Malaysia where it is dominated by local institutions and foreign investors with close to 80% of the overall market participation.

However, like everywhere else, there was a substantial retail investor influx in 2020 due to the pandemic. Since then, the hottest sector in 2020 were being shorted including healthcare and technology.

This went up another notch when a negative report on the semiconductor industry was released by Morgan Stanley in August titled “Winter Is Here”. It drove Samsung’s share price down another 13%.

This then begs the question of the role of short sellers, given the disdain by retail investors all over the world. Do short sellers have merits to exist in the financial markets?

I would like cite the examples of a few renown short-selling firms such as Muddy Waters Research and Hidenburg Research, which made spectacular bets against questionable companies.

Believe it or not, these shorts were not easy to pull off considering the companies that were targeted by them were among the flavour of the day for investors.

Luckin Coffee Inc, listed on Nasdaq, had a peak market capitalisation of US$12.7bil (RM53.14bil). It was once touted as “China’s Starbucks” with over 4,792 stores and kiosks. Prior to the accounting scandal, Luckin was reporting 500% annual revenue growth.

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