The Short Report – 19 Mar 2020

Weekly Reports | Mar 19 2020

See Guide further below (for readers with full access).

Summary:

Week ending March 12, 2020

Last week the ASX200 fell -15%. No reason to go into detail.

As the table below suggests, precipitous share price falls are not at this stage triggering widespread profit-taking on short positions. Indeed, more red than green implies shorts are net building rather than reducing.

Some exceptions are hard-hit travel agents Webjet ((WEB)) and Corporate Travel Management ((CTD)), which are seeing some profit-taking but only at a gradual pace. Slightly more significant is Bendigo & Adelaide Bank ((BEN)), the shorts of which fell to 7.6% from 9.9% the week before.

Bendalaide shares have fallen -40% from their high, but then Webjet and Corporate Travel have suffered -70% declines (to current prices). The RBA will backstop Bendalaide. The travel agents are reliant upon government support.

More notable are short position increases.

Pact Group ((PGH)) shorts have risen to 7.1% from below 5%. This might be an ASIC data blip so we’ll keep an eye out next week. While Pact has fallen along with everything else, its recycling story should be a longer term positive.

No surprises, nevertheless, G8 Education ((GEM)) shorts have risen to 6.9% from 5.0% and oOh!media's ((OML)) to 6.5% from below 5%. In the former case, child care centres are no-go zones. In the latter, lock-downs and work-from-home means outdoor advertising has little audience, and the company is heavily indebted.

No Movers & Shakers this week, as there is only one story to tell.

Weekly short positions as a percentage of market cap:

10%+
GXY   20.2
SYR    20.1
ORE    14.3
SDA    13.2
MTS    13.1
ING     12.6
GWA  10.8
NEA    10.6
NCZ    10.6


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