The number of disclosures of short positions in shares listed in Europe has increased to almost 12,000. during the first three months of this year, according to data from Breakout Point. This is the highest level since the introduction of regulations on the disclosure of short positions in 2012, writes the Financial Times.
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A short position is an investment strategy in which an investor earns money from a decline in the price of an asset (e.g. shares).
The war with Iran is changing the balance of power on the stock exchanges
As the British daily notes, short positions must be disclosed when they reach 0.5%. the company's share capital. These numbers do not correspond to 12 thousand. individual short positions as they may reflect multiple adjustments to positions by funds, but are an approximate indicator.
Europe “seems susceptible to short selling in times of crisis,” Andreas Bruckner, European equities strategist at Bank of America, told the FT, pointing to the ongoing war in Iran.
He added that the region's stocks – previously a “major beneficiary” of “global growth deals” – are now “the most vulnerable to the growing energy crisis.”.
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They want to make money from the war with Iran
Hedge funds AQR Capital Management and Two Sigma Investments are among those that have increased their exposure to European stocks as the war with Iran sends shockwaves through global financial markets.
AQR Capital Management now has 128 disclosed short positions in European-listed shares, up from 54 a year ago, while the number of disclosed short positions in Two Sigma Investments has increased from three to 85 over the same period, according to Breakout Point.
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The increase in short positions does not necessarily mean a negative picture of the European market as a whole, as some funds balance their bearish positions with long positions in other shares,
Indices on stock exchanges in Europe
The main stock indices in Europe ended Tuesday's session in the red. The escalation of the conflict in the Middle East raises concerns about a deepening energy crisis. The Euro Stoxx 50 index fell by 1.05% on Tuesday.
As Bloomberg notes, the war with Iran hit shares of euro zone companies harder than shares of US companies. Index Euro Stoxx 50 dropped by over 7%. since the beginning of hostilities, while the American S&P 500 index has fallen by less than 4% during this time.
Source: Financial Times
