The Short Report
The Short Report draws upon data provided by the Australian Securities & Investment Commission (ASIC) to highlight significant weekly moves in short positions registered on stocks listed on the Australian Securities Exchange (ASX). Short positions in exchange-traded funds (ETF) and non-ordinary shares are not included. Short positions below 5% are not included in the table below but may be noted in the accompanying text if deemed significant.
Please take note of the Important Information provided at the end of this report. Percentage amounts in this report refer to percentage of ordinary shares on issue.
Stock codes highlighted in green have seen their short positions reduce in the week by an amount sufficient to move them into a lower percentage bracket. Stocks highlighted in red have seen their short positions increase in the week by an amount sufficient to move them into a higher percentage bracket. Moves in excess of one percentage point or more are discussed in the Movers & Shakers report below.
Week ending June 7, 2018
Last week saw the ASX200 in rally mode, led by resources, as a risk-on mood seemed to permeate. The market then stalled for the long weekend and of yesterday, it was back to risk-off again.
Again we saw, last week, not a lot of movement in short positions. There’s a bit of red towards the low end of the table but nothing substantial, with one exception.
MYOB ((MYO)) saw its share price plunge -8% last Thursday. Short positions jumped to 7.1% from 5.7%. See below.
We note, for the sake of interest, that at the very bottom of last week’s table is Gateway Lifestyle Group ((GTY)) on 5.0% shorted. Yesterday’s takeover offer for the company sparked a 15% share price jump.
Weekly short positions as a percentage of market cap:
HVN, MYX, MTS, BIN, AAD, PLS, IPH, GMA
In: MYX, GMA Out: MLX
RFG, FLT, TPM, IFL, BGA, WEB, BKL, QUB, MLX, SFR, BWX, ING, MYO
In: MLX, BWX, ING, MYO Out: GMA, APO
RSG, MOC, CSR, SEK, TGR, KAR, PRY, BAP, BEN, ALX*
In: BEN, ALX Out: ING, BWX
NSR, AHG, NUF, SUL, CCP, NXT, APT, IMF, JHC, BOQ, GTY
In: APT Out: MYO, ALX, BEN
* Note:Atlas Arteria ((ALX)) is the new name for Macquarie Atlas Roads (MQA).
Movers & Shakers
Last week MYOB ((MYO)) announced it was pulling out of its bid to acquire the accountant group assets of rival Reckon ((RKN)). Analysts assumed ACCC requirements for approval rendered the acquisition unviable. Instead, MYOB will invest the money it had put aside in organic growth.
Analysts believe it seems sensible not to proceed, but have downgraded earnings forecasts as a result of the lost opportunity. Two downgrades to Hold or equivalent ratings reflect a view it’s a hard road now ahead, organically, for MYOB.
Morgan Stanley went one step further when it took the opportunity to initiate coverage of the stock with an Underweight rating. In the new world of disruption, where software-as-a-service (SaaS) is king, the broker believes it will be the fast movers eating the slow movers rather than the big eating the small.
To that end, Morgan Stanley suggests Xero ((XRO)) is set to be the winner in the space, despite MYOB’s entrenched longevity.
One might argue that once upon a time, MYOB appeared to “disrupt” the cosy world of accountants and bookkeepers.
MYOB’s share price fell -8% on the news and short positions rose to 7.1% from 5.7%.
ASX20 Short Positions (%)
* Replaces AMP
To see the full Short Report, please go to this link
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