Tuesday, January 31, 2023

European short bets spike in October



Hedge fund bets against European companies spiked in October, with Ireland moving into short-seller crosshairs.

The number of overall registered short positions increased to 529 on 31 October, up from 483 on 30 September.

Ireland had the most short interest, followed by France and the UK, in a sign more tech sector issues could harm the Irish economy. Twitter announced mass layoffs last week.

“Strong short interest across Europe reflects expectations among managers that equity markets will continue to face headwinds as markets content with rising rates, persistent inflation and the ongoing war in Ukraine,” said Michelle Silsbe, director at SEI Novu, which compiled the findings from public data.

Bridgewater and Marshall Wace remain the top two in terms of short exposures, amounting to 33.5% and 32.8% at the end of October, respectively — up from 19.3% and 16% a month earlier.

Ireland’s turn as a short-seller target comes after German shorts spiked in September after high energy prices darkened the winter outlook for its manufacturing industry.

The top 5 most shorted European stocks by size, as a proportion of all registered European short positions in Esma-regulated countries, as of 31 October were:

  • Flutter Entertainment PLC, 45.4%
  • ASML Holding NV, 2%
  • TotalEnergies SE, 1.5%
  • Sanofi, 1%
  • Alstom, 1%