Wednesday 19 December 2018

Interserve / Kier Group short selling update

Update on my update: I'm reliably informed that other data sources suggest the actual total short position in Kier Group is more than double that in the FCA list. Interserve 50% higher than the totals on the FCA list.

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I've been looking through the publicly available short data again to see if anything interesting has been happening. Both Kier Group and Interserve have continued to face a lot of bad press.

However what had happened was that the shorts in both companies looked like they were dropping away. So in Kier Group they fell back from a high of about 14% at the end of November to under 11% at the end of last week. As a reminder 14% was the highest the short had been in the past 5 years (chart nicked from Shorttracker)


Similarly the shorts in Interserve were at nearly 6.5% at the end of Nov/start of Dec, but they also fell back (though in this case they had been at a high of over 9% when Carillion tanked).

In the past couple of weeks we've seen the bad news shake out at both companies, so I had assumed that this might explain a tail off in shorts. But they seem to be coming back at both companies, and there is some interesting detail.

For example, looking at Kier Group, BlackRock's short of 2.73% is the highest it has been so far, and has been taken to this level in the past couple of days. Similarly, Marshall Wace now has a total short of 4.7% across both Marshall Wace LLP (where it's current position of 3% is about the highest it's been) and Marshall Wace Asia (1.7%, the highest it has been). And Millennium International Management has shown up with a 0.5%+ position for the first time this week.

It is quite possible that the subset of data I can access is too small/volatile to read too much into. One investor going above or below the 0.5% threshold obviously makes quite a big difference. But then I question why the FCA sets the bar at 0.5% - in large cap companies it costs a lot of dough to get to 0.5%. It's also possible that the shorts edging up and down a bit don't mean that much. But it doesn't quite feel like that. So, I'll keep on keeping an eye on it.

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