The Short Report

Weekly Reports | Feb 14 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 February 7, 2019

Last week saw the ASX200 rally hard, from around 5850 all the way to 6100. Thank you Mr Hayne.

To that end, and given all the attention the big banks received with regard hedge funds setting themselves short, we note from the Top 20 table below that ANZ Bank ((ANZ)) shorts fell to 1.4% from 1.5% last week, Commonwealth Bank ((CBA)) to 2.1% from 2.3% and Westpac ((WBC)) to 1.9% from 2.1% while National Bank ((NAB)) saw no change at 0.7%.

These may seem like minimal changes, and indeed minimal short positions, but we have to remember that in market cap terms, the four banks alone make up some 20% of the ASX200. So not insignificant.

There was a bit of action at the top of the most shorted table last week, although no move at the time reflected an earnings report release.

Poultry producer Inghams Group ((ING)) has moved into second spot on the table with an increase to 15.7% shorted from 14.8%. While Inghams produces poultry for the table it also produces stock feed, and will be impacted by droughts and flooding rains.

The town of Ingham in Queensland was one of the worst hit by flooding, but there’s no connection.

Lithium producer Galaxy Resources ((GXY)) saw shorts fall to 15.3% from 16.9% but short positions in the battery-related space are highly volatile.

JB Hi-Fi ((JBH)) shorts fell to 14.6% from 15.6% ahead of Monday’s earnings release, which scored a “not bad” and resulted in only a modest share price increase.

Nanosonics ((NAN)) shorts rose to 7.0% last week from 5.5%. But given they were 7.5% the week before that, and 6.0% the week before that, I’m going to ignore it.

A few familiar faces returned to the bottom end of the 5%-plus shorted table last week, but they’d been lurking not far below anyway.

Recent trading updates from auto-related companies suggest things aren’t quite as bad as feared for the consumer-facing car industry, hence those stocks have enjoyed a bit of a recovery. Which is probably why we see Automotive Holdings ((AHG)) and ARB Corp ((ARB)) back in the table.

We also welcome a newbie to the table in funds management platform Hub24 ((HUB)), at 5.6% shorted. Analysts are still not entirely sure how the outcome of the Royal Commission will impact on the platform space.

No Movers & Shakers this week.

Weekly short positions as a percentage of market cap:

10%+

SYR    16.7
ING     15.7
GXY   15.3
JBH     14.6
IVC     13.3
ORE    13.0
MTS    12.7
BWX   11.8
MYR   11.3
DMP   10.9


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