##{"id":59842,"date":"2012-04-24T10:58:52","date_gmt":"2012-04-24T00:58:52","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2012\/04\/24\/the-short-report-68\/"},"modified":"2012-04-24T10:58:52","modified_gmt":"2012-04-24T00:58:52","slug":"the-short-report-68","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2012\/04\/24\/the-short-report-68\/","title":{"rendered":"The Short Report"},"content":{"rendered":"

.ref1 {background-color:#B8E3F8;}<\/p>\n

\n\tBy Chris Shaw<\/p>\n

\n\tAlready one of the top 20 short positions on the Australian market, Myer ((MYR<\/span>)) saw total shorts increase further for the week from April 10. Shorts rose to 12.92% from 11.57% previously, the market still dealing with weak conditions for the consumer discretionary sector.<\/p>\n

\n\tAlso in the top 20 and exposed to discretionary spending are the likes of JB<\/span> Hi-Fi<\/span> ((JBH<\/span>)), David Jones ((DJS)), Billabong<\/span> ((BBG<\/span>)), Flight Centre ((FLT<\/span>)) and Harvey Norman ((HVN<\/span>)), with Myer now in the number two position. JB<\/span> Hi-Fi<\/span> remains the clear number one, shorts in the stock increasing for the week to 23.22% from 22.3% the week prior.<\/p>\n

\n\tOthers with significant short positions include Cochlear ((COH<\/span>)), Lynas<\/span> Corporation ((LYC<\/span>)), Iluka<\/span> ((ILU<\/span>)) and Gunns<\/span> ((GNS<\/span>)).<\/p>\n

\n\tPaladin ((PDN<\/span>)) was the other stock where shorts rose by almost 1.0 percentage points, rising to 5.7% for the week from April 10 from 4.73% previously. The increase came leading into a quarterly production report that fell short of market expectations, while Paladin has at least addressed refinancing concerns with the announcement yesterday of a convertible bond issue.<\/p>\n

\n\tThe most significant change in shorts for the week from April 10 was in Beach Energy ((BPT<\/span>)), where total positions fell to 2.04% from 6.11% previously as the market continues to adjust to Beach's capital raising last month.<\/p>\n

\n\tShorts in Charter Hall Office ((CQO<\/span>)) also declined, falling to 0.03% from 1.46% previously as the company confirmed some consortium agreements and confirmed distribution guidance. Lynas<\/span> was one of the few in the top 20 to enjoy a fall in short positions in the week from April 10, with a decline to 9.23% from 9.9% as at least one broker adjusted its model to account for delays to the LAMP project in Malaysia.<\/p>\n

\n\tWith respect to monthly changes from March 16 the largest increase was in Carsales.com ((CRZ<\/span>)), positions rising to 11.47% from 6.32% previously. The gain has been a relatively constant one since the company announced it was taking a stake in New Zealand online retailer Torpedo7<\/span>.<\/p>\n

\n\tShorts in Bathurst Resources ((BTU) rose in the month to 4.44% from 0.93% following a disappointing quarterly report and the fact there will be some delays to the Escarpment appeals process, while Paladin's shorts have increased over the month by a total of 2.20 percentage points.<\/p>\n

\n\tFalls in monthly short positions were less pronounced, the largest a decline to 1.78% from 3.62% for Alkane<\/span> ((ALK<\/span>)), which came as the company acquired royalties over the Tomingly<\/span> gold project.<\/p>\n

\n\tRBS<\/span> Australia notes short positions in GWA<\/span> ((GWA<\/span>)) have risen over the past week by more than one percentage point to 4.6%, the broker seeing this a reflection of still tough conditions in the housing market. With cuts to housing cycle forecasts and the expectation of a flatter cycle bottom a recovery for GWA<\/span> and similar companies is likely to be more protracted than RBS<\/span> had previously thought.<\/p>\n

\n\tOthers in the market pay be taking a similar view, as RBS<\/span> notes short positions rose over the past week in the likes of CSR ((CSR)), BlueScope<\/span> Steel ((BSL<\/span>)) and GUD<\/span> Holdings, all of which have some exposure to the housing market.<\/p>\n

\n\t <\/p>\n

\n\tTop 20 Largest Short Positions<\/h2>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\t\t\t\tRank<\/td>\n\n\t\t\t\tSymbol<\/td>\n\n\t\t\t\tShort Position<\/td>\n\n\t\t\t\tTotal Product<\/td>\n\n\t\t\t\t%Short<\/td>\n<\/tr>\n
\n\t\t\t\t1<\/td>\n\n\t\t\t\tJBH<\/span><\/td>\n\n\t\t\t\t22957064<\/td>\n\n\t\t\t\t98850643<\/td>\n\n\t\t\t\t23.22<\/td>\n<\/tr>\n
\n\t\t\t\t2<\/td>\n\n\t\t\t\tMYR<\/span><\/td>\n\n\t\t\t\t75484581<\/td>\n\n\t\t\t\t583384551<\/td>\n\n\t\t\t\t12.92<\/td>\n<\/tr>\n
\n\t\t\t\t3<\/td>\n\n\t\t\t\tISO<\/td>\n\n\t\t\t\t717405<\/td>\n\n\t\t\t\t5703165<\/td>\n\n\t\t\t\t12.58<\/td>\n<\/tr>\n
\n\t\t\t\t4<\/td>\n\n\t\t\t\tCRZ<\/span><\/td>\n\n\t\t\t\t26824439<\/td>\n\n\t\t\t\t233684223<\/td>\n\n\t\t\t\t11.47<\/td>\n<\/tr>\n
\n\t\t\t\t5<\/td>\n\n\t\t\t\tCOH<\/span><\/td>\n\n\t\t\t\t6255238<\/td>\n\n\t\t\t\t56929432<\/td>\n\n\t\t\t\t11.00<\/td>\n<\/tr>\n
\n\t\t\t\t6<\/td>\n\n\t\t\t\tFXJ<\/span><\/td>\n\n\t\t\t\t256447608<\/td>\n\n\t\t\t\t2351955725<\/td>\n\n\t\t\t\t10.91<\/td>\n<\/tr>\n
\n\t\t\t\t7<\/td>\n\n\t\t\t\tDJS<\/td>\n\n\t\t\t\t55037981<\/td>\n\n\t\t\t\t524940325<\/td>\n\n\t\t\t\t10.47<\/td>\n<\/tr>\n
\n\t\t\t\t8<\/td>\n\n\t\t\t\tFLT<\/span><\/td>\n\n\t\t\t\t9952226<\/td>\n\n\t\t\t\t100024697<\/td>\n\n\t\t\t\t9.92<\/td>\n<\/tr>\n
\n\t\t\t\t9<\/td>\n\n\t\t\t\tBBG<\/span><\/td>\n\n\t\t\t\t25035585<\/td>\n\n\t\t\t\t255102103<\/td>\n\n\t\t\t\t9.80<\/td>\n<\/tr>\n
\n\t\t\t\t10<\/td>\n\n\t\t\t\tLYC<\/span><\/td>\n\n\t\t\t\t158271121<\/td>\n\n\t\t\t\t1714496913<\/td>\n\n\t\t\t\t9.23<\/td>\n<\/tr>\n
\n\t\t\t\t11<\/td>\n\n\t\t\t\tEGP<\/span><\/td>\n\n\t\t\t\t55781335<\/td>\n\n\t\t\t\t688019737<\/td>\n\n\t\t\t\t8.10<\/td>\n<\/tr>\n
\n\t\t\t\t12<\/td>\n\n\t\t\t\tHVN<\/span><\/td>\n\n\t\t\t\t78167927<\/td>\n\n\t\t\t\t1062316784<\/td>\n\n\t\t\t\t7.33<\/td>\n<\/tr>\n
\n\t\t\t\t13<\/td>\n\n\t\t\t\tGNS<\/span><\/td>\n\n\t\t\t\t61500887<\/td>\n\n\t\t\t\t848401559<\/td>\n\n\t\t\t\t7.24<\/td>\n<\/tr>\n
\n\t\t\t\t14<\/td>\n\n\t\t\t\tWTF<\/td>\n\n\t\t\t\t14124172<\/td>\n\n\t\t\t\t211736244<\/td>\n\n\t\t\t\t6.65<\/td>\n<\/tr>\n
\n\t\t\t\t15<\/td>\n\n\t\t\t\tILU<\/span><\/td>\n\n\t\t\t\t26552271<\/td>\n\n\t\t\t\t418700517<\/td>\n\n\t\t\t\t6.33<\/td>\n<\/tr>\n
\n\t\t\t\t16<\/td>\n\n\t\t\t\tTRS<\/span><\/td>\n\n\t\t\t\t1573891<\/td>\n\n\t\t\t\t26071170<\/td>\n\n\t\t\t\t6.06<\/td>\n<\/tr>\n
\n\t\t\t\t17<\/td>\n\n\t\t\t\tTEN<\/td>\n\n\t\t\t\t62123783<\/td>\n\n\t\t\t\t1045236720<\/td>\n\n\t\t\t\t5.93<\/td>\n<\/tr>\n
\n\t\t\t\t18<\/td>\n\n\t\t\t\tCSR<\/td>\n\n\t\t\t\t29830093<\/td>\n\n\t\t\t\t506000315<\/td>\n\n\t\t\t\t5.89<\/td>\n<\/tr>\n
\n\t\t\t\t19<\/td>\n\n\t\t\t\tSGT<\/span><\/td>\n\n\t\t\t\t9466583<\/td>\n\n\t\t\t\t165074137<\/td>\n\n\t\t\t\t5.74<\/td>\n<\/tr>\n
\n\t\t\t\t20<\/td>\n\n\t\t\t\tPDN<\/span><\/td>\n\n\t\t\t\t47575816<\/td>\n\n\t\t\t\t835645290<\/td>\n\n\t\t\t\t5.70<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\tTo see the full Short Report, please go to this link<\/a><\/p>\n

\n\tIMPORTANT INFORMATION ABOUT THIS REPORT<\/i><\/strong><\/p>\n

\n\tThe above information is sourced from daily reports published by the Australian Investment & Securities Commission (ASIC<\/span>) and is provided by FNArena<\/span> unqualified as a service to subscribers. FNArena<\/span> would like to make it very clear that immediate assumptions cannot be drawn from the numbers alone.<\/i><\/p>\n

\n\tIt is wrong to assume that short percentages published by ASIC<\/span> simply imply negative market positions held by fund managers or others looking to profit from a fall in respective share prices. While all or part of certain short percentages may indeed imply such, there are also a myriad of other reasons why a short position might be held which does not render that position “naked” given offsetting positions held elsewhere. Whatever balance of percentages truly is a “short” position would suggest there are negative views on a stock held by some in the market and also would suggest that were the news flow on that stock to turn suddenly positive, “short covering” may spark a short, sharp rally in that share price. However short positions held as an offset against another position may prove merely benign.<\/i><\/p>\n

\n\tOften large short positions can be attributable to a listed hybrid security on the same stock where traders look to “strip out” the option value of the hybrid with offsetting listed option and stock positions. Short positions may form part of a short stock portfolio offsetting a long share price index (SPI<\/span>) futures portfolio – a popular trade which seeks to exploit windows of opportunity when the SPI<\/span> price trades at an overextended discount to fair value. Short positions may be held as a hedge by a broking<\/span> house providing dividend reinvestment plan (DRP<\/span>) underwriting services or other similar services. Short positions will occasionally need to be adopted by market makers in listed equity exchange traded fund products (EFT). All of the above are just some of the reasons why a short position may be held in a stock but can be considered benign in share price direction terms due to offsets.<\/i><\/p>\n

\n\tMarket makers in stock and stock index options will also hedge their portfolios using short positions where necessary. These delta hedges often form the other side of a client's long stock-long put option protection trade, or perhaps long stock-short call option (“buy-write”) position. In a clear example of how published short percentages can be misleading, an options market maker may hold a short position below the implied delta hedge level and that actually implies a “long” position in that stock.<\/i><\/p>\n

\n\tAnother popular trading strategy is that of “pairs trading” in which one stock is held short against a long position in another stock. Such positions look to exploit perceived imbalances in the valuations of two stocks and imply a “net neutral” market position.<\/i><\/p>\n

\n\tAside from all the above reasons as to why it would be a potential misconception to draw simply conclusions on short percentages, there are even wider issues to consider. ASIC<\/span> itself will admit that short position data is not an exact science given the onus on market participants to declare to their broker when positions truly are “short”. Without any suggestion of deceit, there are always participants who are ignorant of the regulations. Discrepancies can also arise when short positions are held by a large investment banking operation offering multiple stock market services as well as proprietary trading activities. Such activity can introduce the possibility of either non-counting or double-counting when custodians are involved and beneficial ownership issues become unclear.<\/i><\/p>\n

\n\tFinally, a simple fact is that the Australian Securities Exchange also keeps its own register of short positions. The figures provided by ASIC<\/span> and by the ASX<\/span> at any point do not necessarily correlate.<\/i><\/p>\n

\n\tFNArena<\/span> has offered this qualified explanation of the vagaries of short stock positions as a warning to subscribers not to jump to any conclusions or to make investment decisions based solely on these unqualified numbers. FNArena<\/span> strongly suggests investors seek advice from their stock broker or financial adviser before acting upon any of the information provided herein.<\/i><\/p>\n

\n\tTechnical limitations<\/strong><\/p>\n

\n\tIf you are reading this story through a third party distribution channel and you cannot see charts included<\/span>, we apologise<\/span><\/span><\/span>, but technical limitations are to blame.<\/em><\/strong><\/p>\n

\n\tFind out why FNArena<\/span><\/span> subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided.<\/p>\n","protected":false},"excerpt":{"rendered":"

FNArena’s weekly update on short positions in the Australian share market.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[23,45,89,35,24,88,37,25],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/59842"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=59842"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/59842\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=59842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=59842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=59842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}