ECONOMY

Greece extends ban on short selling

Greece’s securities regulator on Thursday extended a short-selling ban on the Athens stock exchange that was due to expire on Friday to January 27, it said after a board meeting.

The restriction initially went into effect on August 9. In late September, the securities watchdog, in consultation with other regulatory authorities in the European Union extended the ban by two months to December 9.

“The capital market commission is closely monitoring market developments and pertinent decisions in the European Union,» the commission said.

Short-selling is a common way for hedge funds and other investors to bet on falling share prices. Traders borrow stocks to sell them in the hope of scooping them up later at a lower price and pocketing the difference.

Greek stocks have lost 52 percent so far this year, pummeled by the debt crisis and a deep recession.

Last month Italy announced a ban on naked short-selling of stocks in a bid to reduce market volatility as the eurozone debt crisis worsened.

It also extended a short-selling ban on financial stocks until January 15, a day after France extended its own ban on the shares of 10 financial institutions by three months.

The regulator said it may review its stance before the ban’s new expiration date, in cooperation with securities regulators in France, Italy, Spain, Ireland and Belgium.

[Reuters]