Samsung Electronics is drawing close attention in the capital market as its stock prices have risen 8.4 percent over the past three weeks since the impact of the Brexit referendum hit the KOSPI. It closed at 1.518 million won ($1,337) last Friday, compared with 1.4 million won on June 24.

Its share price growth over the past two months was more noteworthy, gaining 21.6 percent from 1.248 million won on May 16.

Samsun Electronics shares have reached their highest point in three years, and the issue is whether the chipmaker’s stock price will break through its all-time high of 1.576 million won, which was posted on Jan. 2, 2013, in the coming trade sessions.

Aside from the bullish position of its No. 1 listed company by market capitalization, the first-tier KOSPI gained 92.02 points, or 4.7 percent, from 1,925.24 on June 24 (the day the results of the British referendum to leave the European Union was announced) to 2,017.26 on July 15.

This has proved that projections from the majority of local brokerages were a long way off. Right after the referendum showed that the U.K. had decided to leave the European Union, most securities firms issued the possibility of a heavy capital outflow with some of them predicting the KOSPI sliding to 1,800 points.

Foreigners have bought a net value of 1.69 trillion won worth of shares on the main bourse for the past month. They net purchased local equities 12 out of the 16 sessions since June 24, posting their seventh consecutive day of net buying from July 7-15.

On the contrary, small investors net sold 931 billion won in the same month. A large portion of them are estimated to have suffered losses due to brokerage reports recommending quick selling on Brexit woes.

This shows the long-standing situation in which the local securities industry fails to gain credibility in its research reports. Few of them had said that Brexit would be a decent opportunity for Asian emerging markets, including South Korea.

Though their decision to invest in the capital market is entirely their own choice and responsibility, the undeniable situation is that individuals have frequently been duped by groundless research reports.

When small investors dump shares on “inflated” negative factors, local institutional investors used to rake in the shares at a bargain. For several sessions after June 24, many institutions are presumed to have carried out active short-covering (or payment at lower prices) for their previous selling of borrowed stocks at higher prices (or short-sales).

Now there is no report predicting a plunge to the 1,800 mark, and many of the brokerages have begun touting companies whose stock prices rebounded at a rapid pace.

It is worth watching whether they will lean toward the active short-sale position again as the benchmark index has approached the psychological upper ceiling.

Foreign institutions are recording higher profit-taking rates compared to local institutions. Nevertheless, local institutions have been the center of public criticism for their arbitrary reports and habitual short selling.

In two weeks, the daily trading session of the equity market will be extended by 30 minutes. The closing time of the KOSPI and secondary KOSDAQ bourses will be changed from the present 3 p.m. to 3:30 p.m.

It does not seem that the financial authority’s recent policy is related to gaining public support by fostering a level playing field.

The authority needs to respond to speculation among some critics that the intention to collect more securities transaction taxes is behind the extension of daily trading hours. Brokerage firms could take more in service charges on buy or sell orders.

The aftermath of the Brexit announcement so far proves that the local bourse is resilient to external shocks on the back of its competitive fundamentals led by Samsung Electronics and other blue chip conglomerates.

In adopting a proactive stance, it is time for regulators including the Financial Supervisory Service and the Korea Exchange to call for the government to abolish the short-selling system or at least provide individuals with the same right.

If the government turns away from calls for fair competition, the index may stay confined in the range of between 1,850 and 2,100 for more years. Many have even taken to calling it the “BOXPI” or “short-sellers’ territory.”