ROB ROSE: Curbing the big short
SA’s authorities are proposing new rules to introduce greater transparency into the short-selling market. It’s a welcome move
It’s commendable that rather than cave in to the hysterical howls of besieged CEOs, the authorities seem to be leaning towards using a light touch in regulating short sellers like the often reviled Viceroy. Short sellers, for the uninitiated, are traders who bet on a share price falling. It’s the inverse of what many people consider conventional investment, where you take a "long" position on a share, expecting a price to rise. Though short selling has been around for decades, it hasn’t made headlines in SA until recently. Until Steinhoff happened in December 2017, and a day later a little-known research outfit called Viceroy published a withering report on much of the fraud. Viceroy followed it up too. In January, it published a report on banking group Capitec, and its stock price promptly plunged 25% within a week. Capitec growled with indignation, demanding all manner of investigations and, presumably, public hangings of anyone who dared suggest its business model was predatory. ...
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