Macro and Australian equity strategist, Macro Strategy Advisors

Shane Lee

Macro and Australian equity strategist

Macro Strategy Advisors

Thematic (Sector/Industry)

Australia Consumer discretionary / Thematic (Sector/Industry)

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) are 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, N SR, 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 IPL.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.

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) are 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, N SR, 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 IPL.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.

Taking the Pulse of ASX Shorts