The Short Report

Weekly Reports | Feb 07 2019

Guide:

The Short Report draws upon data provided by the Australian Securities & Investment Commission (ASIC) to highlight significant weekly moves in short positions registered on stocks listed on the Australian Securities Exchange (ASX). Short positions in exchange-traded funds (ETF) and non-ordinary shares are not included. Short positions below 5% are not included in the table below but may be noted in the accompanying text if deemed significant.

Please take note of the Important Information provided at the end of this report. Percentage amounts in this report refer to percentage of ordinary shares on issue.

Stock codes highlighted in green have seen their short positions reduce in the week by an amount sufficient to move them into a lower percentage bracket. Stocks highlighted in red have seen their short positions increase in the week by an amount sufficient to move them into a higher percentage bracket. Moves in excess of one percentage point or more are discussed in the Movers & Shakers report below.

Summary:

Week ending January 31, 2019

Last week saw the ASX200 track sideways, before Tuesday’s lift-off.

A quick tally of the reds and greens in the table below shows a ratio of 2 to 13, suggesting only two stocks with short positions in excess of 5% saw an increase in shorts last week while thirteen saw a reduction. The total number of stocks more than 5% shorted reduced by five.

One might be forgiven for thinking there’s an earnings season upon us.

A glance at the Top 20 table below suggests that if hedge funds were building up shorts in the Big Four banks ahead of the release of the Royal Commission report, they weren’t doing so in the week up to last Thursday. Or they had already built such positions, given 2% shorts for both Commonwealth Bank ((CBA)) and Westpac ((WBC)) is historically on the high-side.

It will be interesting to see what impact Tuesday’s rally has on those positions as of next week.

In the same context we note shorts in IOOF Holdings ((IFL)) fell to 8.6% last week from 9.6%. Probably a sensible move ahead of IOOF’s 8% (at one stage 14%) pop on Tuesday.

The only other short position change of one percentage point or more was for Nanosonics ((NAN)), which fell to 5.5% from 7.5%, but given shorts rose to 7.5% from 6.0% the week before, either (a) shorts for the stock are very volatile or (b) it’s yet another blip in the ASIC data.

The only two stocks to see short position increases last week, albeit not by much, were Sims Metal Management ((SGM)), who last week issued a profit warning, and Reliance Worldwide ((RWC)), who this week reiterated FY19 guidance.

No Movers & Shakers this week. This will potentially begin to move and shake once earnings season is in full swing, nonetheless. 

Weekly short positions as a percentage of market cap:

10%+
GXY   16.9
SYR    16.4
JBH     15.6
ING     14.8
ORE    13.5
IVC     13.3
MTS    12.9
BWX   12.0
MYR   11.7
DMP   10.1


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