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Taking the Pulse of ASX Shorts
- In the Aussie stock market, short positioning momentum appears to be easing even though the number of shorts is at its pre-August reporting season level. The average short position (2.0%) and the average decrease in the short position (0.7%pts) is little changed. The structurally challenged Consumer Discretionary sector dominates short positioning in the Aussie market, but junior Miners and small cap Healthcare names are also well represented.
- IGO, HSO, DMP and HT1 have seen the largest increase in their short positions since the start of August. But SAR, VOC, GXL, NSR, AAC and CSR have also seen rising shorts that have pushed them into the list of Top 40 shorted stocks in the market. Stocks outside the Top 40 that have seen large increases in short positioning include NAN, SDA, COE, RSG, IRE, TGR, BLD, QUB, WFD, FBU and
- The largest decreases in short positions have occurred in WSA, ORE, CTD, OSH, A2M and MYR. WSA and ORE remain amongst the most shorted stocks in the market. However, the fall in OSH occurred prior to last week’s Q317 production report, which showed production of its PNG LNG project was exceeding expectations. Shorts in this stock should continue to fall.
- MYR is also one of the most shorted stocks in the market, so the large fall in its short positioning is a surprise. The stock rallied following its FY17 results in September suggesting at least in the short-term, most of the downside risk to earnings is already factored into the current share price.
Provider
Macro Strategy Advisors Pty Ltd
About us:
- The business is a Proprietary Limited Australian company that is owned and fully operated by Shane Lee from a small office in Sydney’s CBD.
- Shane worked for 17 years in Sydney-based senior research roles (economist, equity strategist and bond strategist) in global and regional investment banks and a domestic commercial bank prior to starting Macro Strategy Advisors. These roles straddled the asset classes making him uniquely positioned to advise multi-asset investors. He worked for the Reserve Bank of Australia (RBA) for 3 years as a housing, commercial property and equity market analyst and a liquidity forecasting specialist. He worked as a structural engineer in Queensland for 10 years prior to his career at the RBA.
Aim of our business:
- To partner with our clients in their aim to maximise returns. We provide timely, independent and thought-provoking research on thematic macro issues that are impacting or could impact financial markets. We aim to produce research that prompts our clients to question their assumptions.
Services:
- A fortnightly research note.
- Regular presentations and data support delivered by understanding our clients interests and investment process.
- We also in work in confidence to investigate, analyse and report on issues at our clients direction. This work is done on a project-by-project basis.
- As an Australian based business, the main focus is analysing how domestic and global issues impact Australian investors. However, our global and domestic insights are also valued by our offshore clients.
Our Edge:
- Our low cost base relative to our competitors allows us to provide a quality product at a reasonable cost.
- We are fully independent and don’t support a banking function or any third party. We have no interests other than providing our clients with the best possible research.
- Our focus is not point forecasting, but providing rigorous analysis and insight. We don’t routinely focus on the top or bottom 10% of likely outcomes to create a headline.
- Shane’s background in engineering has provided clients with unique insights into global infrastructure and domestic housing issues.
Shane Lee
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