##{"id":60118,"date":"2012-06-19T11:16:49","date_gmt":"2012-06-19T01:16:49","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2012\/06\/19\/the-short-report-76\/"},"modified":"2012-06-19T11:16:49","modified_gmt":"2012-06-19T01:16:49","slug":"the-short-report-76","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2012\/06\/19\/the-short-report-76\/","title":{"rendered":"The Short Report"},"content":{"rendered":"

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

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

\n\tChanges in short positions for the week from June 5 showed a clear division, as while no stock saw increases of more than one percentage point there were a number of companies for which total shorts declined by more than two percentage points.<\/p>\n

\n\tThe largest decline was in Nexus ((NXS<\/span>)), where shorts fell to 0.15% from 9.59% previously. The fall in positions came following news commercial arrangements for the Crux Field have been expanded to include some earlier development concepts.<\/p>\n

\n\tThe next largest decline in shorts was in Tishman<\/span> Speyer<\/span> ((TSO<\/span>)), where positions declined to 0.01% from 5.92% previously. This reflects the upcoming de-listing of the group following the distribution of US asset sale proceeds to shareholders and a winding up of the company.<\/p>\n

\n\tShorts in Sundance Resources ((SDL<\/span>)) fell to 0.6% from 2.6% the week prior as the company completed a placement of $40 million in new shares to further develop the Mbalam<\/span> project, while shorts in Elders ((ELD<\/span>)) fell to 3.31% from 5.45% following news Ruralco<\/span> Holdings ((RHL<\/span>)) acquired a 10.1% strategic stake in the company. Ruralco<\/span> has indicated it has no current intention to make a takeover offer for Elders.<\/p>\n

\n\tWith no major increases in short positions the largest short interests among ASX-listed<\/span> stocks continue to be dominated by companies with exposure to the consumer discretionary sector. This includes the likes of JB<\/span> Hi-Fi<\/span> ((JBH<\/span>)) Billabong<\/span> ((BBG<\/span>)), Myer ((MYR<\/span>)), David Jones ((DJS)) and Harvey Norman ((HVN<\/span>)).<\/p>\n

\n\tOthers in the top 20 include Lynas<\/span> Corporation ((LYC<\/span>)), Iluka<\/span> ((ILU<\/span>)) and Paladin ((PDN<\/span>)) among the resource sector and industrials such as gaming group Echo Entertainment ((EGP<\/span>)), building materials play CSR ((CSR)) and biotech Mesoblast<\/span> ((MSB<\/span>)).<\/p>\n

\n\tWith respect to monthly changes in positions for the period from May 11, the largest increases were in Linc<\/span> Energy ((LNC<\/span>)) and Myer ((MYR<\/span>)) at just over two percentage points each. Linc<\/span> has seen little in the way of news since replying to an ASX<\/span> price query that targets for FY12<\/span> were expected to be met, while a recent investor day from Myer left brokers with the view sales growth remains an issue for the company.<\/p>\n

\n\tAmong the largest falls in short positions for the month were Spark Infrastructure ((SKI)), where AGM<\/span> commentary included news of some management changes and some strategic changes designed to simplify the group's structure.<\/p>\n

\n\tBradken<\/span> ((BKN<\/span>)) enjoyed a fall in shorts to 1.73% from 4.94% as the market completed the adjustment to earlier news of some issues in the group's rail division, while shorts in Echo fell to 6.36% from 8.93% as the market adjusted expectations to reflect a trading update in the period.<\/p>\n

\n\tShorts in Mirabela<\/span> Nickel ((MBN<\/span>)) fell for the month to 3.11% from 5.13%, this as the market factored in a $120 million capital raising that should help put to rest investor fears with respect to the state of the group's balance sheet.<\/p>\n

\n\tAs noted by RBS<\/span> Australia, shorts in Coca-Cola Amatil<\/span> ((CCL<\/span>)) have risen over the past month by more than 0.5 percentage points to more than 1.6%. In the broker's view this reflects the fact the stock is fully valued at current levels, even allowing for what is regarded as a strong medium-term growth profile.<\/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\t23973358<\/td>\n\n\t\t\t\t98850643<\/td>\n\n\t\t\t\t24.26<\/td>\n<\/tr>\n
\n\t\t\t\t2<\/td>\n\n\t\t\t\tMYR<\/span><\/td>\n\n\t\t\t\t72378948<\/td>\n\n\t\t\t\t583384551<\/td>\n\n\t\t\t\t12.39<\/td>\n<\/tr>\n
\n\t\t\t\t3<\/td>\n\n\t\t\t\tCRZ<\/span><\/td>\n\n\t\t\t\t28135705<\/td>\n\n\t\t\t\t233689223<\/td>\n\n\t\t\t\t12.03<\/td>\n<\/tr>\n
\n\t\t\t\t4<\/td>\n\n\t\t\t\tFLT<\/span><\/td>\n\n\t\t\t\t11716554<\/td>\n\n\t\t\t\t100039833<\/td>\n\n\t\t\t\t11.71<\/td>\n<\/tr>\n
\n\t\t\t\t5<\/td>\n\n\t\t\t\tCOH<\/span><\/td>\n\n\t\t\t\t6508795<\/td>\n\n\t\t\t\t56929432<\/td>\n\n\t\t\t\t11.40<\/td>\n<\/tr>\n
\n\t\t\t\t6<\/td>\n\n\t\t\t\tFXJ<\/span><\/td>\n\n\t\t\t\t257845008<\/td>\n\n\t\t\t\t2351955725<\/td>\n\n\t\t\t\t10.97<\/td>\n<\/tr>\n
\n\t\t\t\t7<\/td>\n\n\t\t\t\tDJS<\/td>\n\n\t\t\t\t57428510<\/td>\n\n\t\t\t\t528655600<\/td>\n\n\t\t\t\t10.83<\/td>\n<\/tr>\n
\n\t\t\t\t8<\/td>\n\n\t\t\t\tLYC<\/span><\/td>\n\n\t\t\t\t182432879<\/td>\n\n\t\t\t\t1714846913<\/td>\n\n\t\t\t\t10.61<\/td>\n<\/tr>\n
\n\t\t\t\t9<\/td>\n\n\t\t\t\tHVN<\/span><\/td>\n\n\t\t\t\t102459626<\/td>\n\n\t\t\t\t1062316784<\/td>\n\n\t\t\t\t9.62<\/td>\n<\/tr>\n
\n\t\t\t\t10<\/td>\n\n\t\t\t\tBBG<\/span><\/td>\n\n\t\t\t\t24772467<\/td>\n\n\t\t\t\t257888239<\/td>\n\n\t\t\t\t9.60<\/td>\n<\/tr>\n
\n\t\t\t\t11<\/td>\n\n\t\t\t\tILU<\/span><\/td>\n\n\t\t\t\t38033593<\/td>\n\n\t\t\t\t418700517<\/td>\n\n\t\t\t\t9.07<\/td>\n<\/tr>\n
\n\t\t\t\t12<\/td>\n\n\t\t\t\tPDN<\/span><\/td>\n\n\t\t\t\t75531506<\/td>\n\n\t\t\t\t835645290<\/td>\n\n\t\t\t\t9.03<\/td>\n<\/tr>\n
\n\t\t\t\t13<\/td>\n\n\t\t\t\tGNS<\/span><\/td>\n\n\t\t\t\t74495950<\/td>\n\n\t\t\t\t848401559<\/td>\n\n\t\t\t\t8.77<\/td>\n<\/tr>\n
\n\t\t\t\t14<\/td>\n\n\t\t\t\tCSR<\/td>\n\n\t\t\t\t38615647<\/td>\n\n\t\t\t\t506000315<\/td>\n\n\t\t\t\t7.63<\/td>\n<\/tr>\n
\n\t\t\t\t15<\/td>\n\n\t\t\t\tWTF<\/td>\n\n\t\t\t\t15548636<\/td>\n\n\t\t\t\t211736244<\/td>\n\n\t\t\t\t7.34<\/td>\n<\/tr>\n
\n\t\t\t\t16<\/td>\n\n\t\t\t\tISO<\/td>\n\n\t\t\t\t413769<\/td>\n\n\t\t\t\t5703165<\/td>\n\n\t\t\t\t7.26<\/td>\n<\/tr>\n
\n\t\t\t\t17<\/td>\n\n\t\t\t\tLNC<\/span><\/td>\n\n\t\t\t\t35079085<\/td>\n\n\t\t\t\t504487631<\/td>\n\n\t\t\t\t6.94<\/td>\n<\/tr>\n
\n\t\t\t\t18<\/td>\n\n\t\t\t\tEGP<\/span><\/td>\n\n\t\t\t\t43684076<\/td>\n\n\t\t\t\t688019737<\/td>\n\n\t\t\t\t6.36<\/td>\n<\/tr>\n
\n\t\t\t\t19<\/td>\n\n\t\t\t\tMSB<\/span><\/td>\n\n\t\t\t\t17992548<\/td>\n\n\t\t\t\t284478361<\/td>\n\n\t\t\t\t6.32<\/td>\n<\/tr>\n
\n\t\t\t\t20<\/td>\n\n\t\t\t\tTRS<\/span><\/td>\n\n\t\t\t\t1570006<\/td>\n\n\t\t\t\t26071170<\/td>\n\n\t\t\t\t6.01<\/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":[32,23,45,35,24,43,39,37,31],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/60118"}],"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=60118"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/60118\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=60118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=60118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=60118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}