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.


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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