Saturday, 21 July 2018

Short stuff

Like everyone does, I spent a bit of my spare time yesterday having a quick trawl through the FCA's list of disclosed short positions. Quite often these fishing trips end up leaving me empty handed, but this time I stumbled on something interesting.

I had a look at Kier Group first. Blackrock has a 2.31% position in Kier Group, so first I had a look to see if they had any other relationship with the company. From a quick trawl it looks like Blackrock used to run a DC scheme for Kier. See screenshots below or check this link -

However, this piece suggests that the scheme (I think) was subsequently taken over Aegon.

The next thing I did was take a look at the Kier Group share register that is available on Capital IQ to see if Blackrock also has a long position. I had assumed that it would show one since Blackrock runs UK tracker funds that hold everything, but actually it is only listed at the bottom of the register and the number of shares and % holding are negative, disclosed in brackets, matching the position that is disclosed in the FCA list. (NB this is a mistake - Blackrock does have a long position too, scroll down here. Interestingly the long position is smaller than the short).

And when I checked the other managers listed with negative holdings (again listed in brackets at the bottom of the Capital IQ register) sure enough they corresponded with other disclosed short positions listed by the FCA. So far, not that exciting, this just shows that S&P dump disclosed short positions into their shareholder database.

So, the next thing I did was look at Ryanair. I've been looking out for disclosed short positions - the Central Bank of Ireland has a register that mirrors the FCA one, but there's nothing there for Ryanair. This doesn't tell us much, like the FCA it has a threshold for disclosure (FCA reports shorts over 0.5%, though it receives disclosures of positions above 0.2% and I assume it has access to IHS Markit which captures way more). The lack of a listing for Ryanair just means there are are no big short positions in the common stock.

However when I went to the bottom of the Ryanair register on Capital IQ... bingo.

I must have looked at the register hundreds of times, but not spotted this or thought of looking there for shorts. Fair play Capital IQ does link to underlying sources, and the negative Ryanair holding listed comes from an SEC disclosure by a firm called Absolute Investment Advisers. The relevant SEC filing is here, but the important bit is in this section -

There it is, the first short in Ryanair that I've been able to completely nail down. It is piddly, but someone somewhere decided to go short. It made me feel a bit less stupid that although the position relates to Q1 2018, the position was only disclosed when that filing was made in early June. So I'm only six weeks late to the party.

Still it's a useful thing to know if you have access to Capital IQ but don't have the IHS Markit feed of shorting/lending data and want to get some basic info.

Finally, I had another look for an example of a manager shorting a client. Blackrock is an easy target because of its scale, so I just picked another large short position on the FCA list - Britvic, where its position is 1.09%. Again it looks like they are running some DC fund options based on the links below -

Here again it has a long position too of a bit over 2%. Interestingly APG - the asset management arm of ABP, the big Dutch public sector fund - also has a big position. (I've just grabbed this from the FT this morning).

And when you dig into APG's holdings this is not the only big position in a UK stock. But that's for another day...

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