In Europe, the technology sector is the most heavily borrowed sector and sees almost three times the level of short interest than the average across the Stoxx 600 index. Europes technology hardware manufacturers see an average of 8.8% of their total shares on loan. These are the findings of Markit Securities Finance.
Technology related stocks dominate the list of most shorted names, with perennial shorts Logitech and Aixtron both seeing more than 20% of their total shares on loan. The average short interest in the main large cap indices in the US and Europe reached annual highs in June. Since then, the European large cap index has seen a sustained period of short covering with short interest close the annual lows. The rate of decline across the S&P 500 has been more muted.
Early June saw average short interest in both the S&P 500 and Stoxx 600 reach annual highs of 3% and 2.9% of the total shares respectively, said Markit. Since the summer, the European large cap index has seen a sustained period short covering with demand to borrow having fallen sharply to 2.3% of the total shares which is close to the annual low of 2.2% seen at the end of March.
Yet when looking at individual stocks it is consumer-facing names, which see the greatest short interest. Perennial shorts GameStop, Safeway and JC Penney top the list with 38.9%, 32.3% and 24.8% of their shares on loan respectively. Demand to borrow JC Penney is up over 50% in the last month alone.
Markit also highlighted how short sellers called back up generator provider Aggreko correctly in light of the company’s profits warning.
(JDC)