SEOUL (Reuters) - South Korean regulators have launched an investigation into potential irregular trades by Deutsche Bank AG's brokerage unit after a record foreign net sale pushed the stock market down by almost 3 percent in late trading on Thursday.
"(We) have confirmed that most foreign selling yesterday came from Deutsche accounts and totalled about 1.6 trillion won ($1.4 billion). As such, the FSS has started investigating the issue along with the Korea Exchange," the Financial Supervisory Service said in a statement on Friday, Nov 12.
A Deutsche Bank spokesman in Singapore declined to comment.
Foreign investors dumped a record net 1.3 trillion won worth of shares on Thursday, causing the benchmark KOSPI index <.KS11> to fall nearly 3 percent at the last minute. [ID:nSGE6AA0IY]
The bank was a top seller in most large-cap shares, including Samsung Electronics Co Ltd <005930.KS>, POSCO <005490.KS>, Hyundai Motor Co <005380.KS> and KB Financial Group Inc <105560.KS> on Thursday, according to data from the Korea Exchange.
The expiry of KOSPI options on Thursday and massive foreign selling propelled overall market turnover to 9.3 trillion won - the most in 18 months.
According to the Thomson Reuters trade log of exchange data, a single trade made up about 14 percent of total KOSPI volume for the day and went through in the last minute of activity. That single transaction caused the index to drop 2.4 percent to 1,916.57.
Some traders suspected an index arbitrage trade between futures and the cash market was behind the transaction, and it may have been a rollover of such a position.
The index has since stabilised and was trading almost unchanged at 1,911.77 points by 0320 GMT on Friday.
"(We) have confirmed that most foreign selling yesterday came from Deutsche accounts and totalled about 1.6 trillion won ($1.4 billion). As such, the FSS has started investigating the issue along with the Korea Exchange," the Financial Supervisory Service said in a statement on Friday, Nov 12.
A Deutsche Bank spokesman in Singapore declined to comment.
Foreign investors dumped a record net 1.3 trillion won worth of shares on Thursday, causing the benchmark KOSPI index <.KS11> to fall nearly 3 percent at the last minute. [ID:nSGE6AA0IY]
The bank was a top seller in most large-cap shares, including Samsung Electronics Co Ltd <005930.KS>, POSCO <005490.KS>, Hyundai Motor Co <005380.KS> and KB Financial Group Inc <105560.KS> on Thursday, according to data from the Korea Exchange.
The expiry of KOSPI options on Thursday and massive foreign selling propelled overall market turnover to 9.3 trillion won - the most in 18 months.
According to the Thomson Reuters trade log of exchange data, a single trade made up about 14 percent of total KOSPI volume for the day and went through in the last minute of activity. That single transaction caused the index to drop 2.4 percent to 1,916.57.
Some traders suspected an index arbitrage trade between futures and the cash market was behind the transaction, and it may have been a rollover of such a position.
The index has since stabilised and was trading almost unchanged at 1,911.77 points by 0320 GMT on Friday.
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