In a separate stream of literature, Diamond and Verrecchia (1987) hypothesize that short-selling
activity will predict negative returns.
and market-neutral strategies can be very rewarding to plan beneficiaries if the plan sponsor is willing to take the time and effort necessary to become involved and understand today's complex capital markets.
Noteworthy, the FRA chairperson issued in February the regulatory decision No 268 for the year 2019 on the rules of securities borrowing operations with the purpose of short-selling
to activate the mechanism, while the EGX and MCDR would prepare the technical requirements for activating the mechanism.
Prior to executing short-selling
orders, trading participants will have to ensure the client has entered into the necessary securities borrowing arrangements.
"We are always keen to be among the first in introducing new investment products that will contribute to the development of our stock markets." said Mohammad Al Mortada Al Dandashi, Managing Director of Al Ramz Corporation Investment & Development PJSC, "We strongly believe that activating advanced financial instruments and trading mechanisms like short-selling
will ultimately help balance the trading forces in our capital markets.
research firms in the market include Muddy Waters Research, Glaucus Research, Citron Research, and Anonymous Analytics.
In the current short-selling
cycle, crude prices have generally fallen less than during previous cycles, especially the wave of short-selling
that started in October 2015 and saw oil prices tumble below $30 at the start of 2016.
However, other studies have shown that short-selling
activity is not abnormally high prior to negative news events as short sellers are generally reactive as opposed to being proactive prior to firm-specific announcements (Daske, Richardson, and Tuna, 2005; Blau and Pinegar, 2012; Blau and Wade, 2012; Engelberg, Reed, and Ringgenberg, 2012).
In turn, the Portugese watchdog, Commissao do Mercado de Valores Mobiliarios, in Lisbon said it was temporarily banning short-selling
in Banif, Millennium bcp, Banco Espirito Santo and Sonae Industria.
SPAIN has banned short-selling
of shares for three months following falls in European markets.
The Financial Service Agency said Thursday it has adopted a new restriction on short-selling
of shares in connection with public offerings to prevent unfair formation of share prices, effective the same day.