Ireland is now the most shorted market in Europe at 46.29%, followed by France with 11.65% and the United Kingdom with 10.78%, according to latest monthly pan-European short position data from SEI Novus.
- Ireland now Europe’s most shorted European market, followed by France and the UK
- Consumer discretionary is most shorted stock sector with significant spike from 17.72% to 54.51% MoM
- Dublin-based global sports betting, gaming and entertainment provider, Flutter Entertainment PLC, is Europe’s most shorted stock, up from 0.9% to 45.4% MoM
Ireland is now the most shorted market in Europe at 46.29%, followed by France with 11.65% and the United Kingdom with 10.78%, according to latest monthly pan-European short position data from SEI Novus.
The Emerald Isle has traditionally maintained a very low short exposure (below 1% throughout 2021) before seeing a slight increase in May 2022, with its exposure staying below 5% until September 2022, ending the month at 4.28%. The exposure shot up abruptly on 3 October to 44.73% and remained above 43% until the end of the month, reaching 46.29% on 31 October.
Ireland’s rapid rise has been fuelled by bets against Flutter Entertainment PLC, the Dublin-based gambling business created by the merger of Paddy Power and Betfair, and the later acquisition of The Stars Group, which is currently Europe’s most shorted company accounting for a huge 45.4% of all short positions at the end of October, up from 0.9% on 30 September.
France’s exposure also increased significantly during October, climbing from 7.02% on 30 September to 11.65% at the end of last month.
The United Kingdom has consistently been among the top three countries with the greatest short exposures since February 2022, though its exposure has significantly declined from the 20.2% seen at 30 September and the 23.46% at 31 August.
Bridgewater Associates Inc was again the manager with the greatest short exposure in October, accounting for 33.54% of registered short positions, up from 19.32% at the end of September, with Marshall Wace and BlackRock Institutional Trust Company maintaining second and third positions. Marshall Wace’s short exposure increased significantly during October, rising from 19.32% at the end of September to 32.82% at the end of last month. BlackRock meanwhile, nearly halved its exposure to 3.72% on 31 October, from 7.16% on 20 September
Consumer discretionary stocks (non-essential goods) were the most shorted sector in October, ending the month accounting for 54.51% of total short activity in Europe, up from 17.72% in September. The second most shorted sector meanwhile, was industrial stocks (manufacturing), which accounted for 11.68% of registered European short positions, down from 24.47% in September.
The largest short position in the last week of October (ending on 28 October) was registered by AQR Capital Management LLC in United Utilities Group PLC, a British water and wastewater services provider, which accounted for 0.07%. The second largest position was registered by Citadel Investment Group LLC in British property development and investment company Land Securities Group PLC, which accounted for 0.05%, while the third largest was registered by Kintbury Capital LLP in Grifols SA, a Spanish multinational pharmaceutical and chemical manufacturer, which accounted for 0.03%.
Key Takeaway | Managers are significantly changing their shorting strategies in a bid to generate strong and consistent returns as the economy continues to slow
