Italy and Spain Ban Short Selling After Record Market Plunge
Short selling in some Italian and Spanish securities will also be banned in all U.K.
(Bloomberg) --
Italian and Spanish securities regulators have banned short sales of some stocks for Friday’s trading in an attempt to bring some stability following the worst market routs in history.
The Spanish ban will affect 69 stocks, including all liquid stocks that fell more than 10% Thursday and all illiquid stocks that fell more than 20%, while in Italy 85 stocks will be affected by the ban.
European stocks tumbled the most on record Thursday, bringing the wipeout of market value to $4 trillion since the sell-off began late last month, as measures announced by the European Central Bank and the U.S. to combat the economic effects of the coronavirus disappointed. The Stoxx Europe 600 is heading for its worst week since the global financial crisis in a week that also included an all-out oil price war. Italian and Spanish benchmarks both had their worst days on record on Thursday.
Short selling in some Italian and Spanish securities will also be banned in all U.K. trading venues for the day, the U.K.’s Financial Conduct Authority said in a statement. A spokesman for the FCA said that U.K. markets continue to remain orderly and that the regulator is continuing to monitor the situation.
UniCredit SpA, Telecom Italia SpA, Banco Santander SA and Telefonica SA are among the companies that will be protected by the short-selling ban.
The Paris-based European Securities and Markets Authority, which coordinates market regulation across the region, is in contact with national officials and is monitoring markets to ensure financial stability, according to a spokesman. In Germany, short selling of stocks will not be banned for now, a spokesman for the Deutsche Boerse said. The country’s benchmark index plunged 12% on Thursday.
A spokesman for Euronext said that they didn’t envisage a ban, while Switzerland’s SIX Exchange isn’t planning a ban as its market is functioning. Dutch market regulator AFM said it is monitoring the situation.
Short-selling restrictions were also put in place for some Asian markets, with South Korea’s Financial Services Commission going the furthest by banning short-selling of shares listed on Kospi, Kosdaq and Konex for six months. In Thailand, short sales were not banned, but rules are being adjusted for current market conditions, according to the President of the country’s stock exchange.
--With assistance from Chiara Remondini, Nicholas Comfort, Lisa Pham, Jan-Patrick Barnert, Albertina Torsoli and Silla Brush.
To contact the reporter on this story: Macarena Munoz in Madrid at mmunoz39@bloomberg.net
To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Celeste Perri
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