The Short Report – 15 Jul 2021

Weekly Reports | Jul 15 2021

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

Summary:

By Greg Peel

Week Ending July 8, 2021.

Last week again saw the ASX200 chop around, running fast to get nowhere.

The Incredible Shrinking Short Table continued to shrink last week, with two more stocks dropping out to leave a mere fifteen 5%-plus shorted.

One of those stocks was New Hope Corp ((NHC)), which jumped in from below 5% the week before to 6.8% shorted, and last week dropped out to below 5% again.

I explained last week this was all to do with the arbitrage opportunity created by the company’s announced convertible issue – short the stock and buy the note, which contains an implicit stock option at a discount.

There were otherwise no short position changes of one percentage point or more last week.

Resolute Mining ((RSG)), having seemingly overcome its issues with production problems at its Syama gold mine and disputes with the Mali government, has been moving steadily up in share price lately and steadily down in short positions.

Also having had a good run recently is a2 Milk ((A2M)), which has been in the 5%-plus table for a very long time but does tend to jump around. The stock re-rated by 20% in the first week of July, and the shorters may be inspired once more, with shorts moving up 7.3% from 6.3%.

Weekly short positions as a percentage of market cap:

10%+
KGN   10.9
WEB   10.5


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