Latest shorting data published by Finansinspektionen, the Swedish Financial Supervisory Authority, as per relevant EU market regulations, suggests that international investors are shorting stocks across multiple sectors in the lead up to this coming weekend’s elections.
For example, Getinge, a global healthcare and life sciences company, has been shorted by BlackRock, AQR Capital Management, Adelphi Capital, WorldQuant and Marshall Wace since 29 August.
Others shorted since then include Ratos (Gladstone Capital Management, Marshall Wace), H & M (AQR Capital Management, Marshall Wace), SKF (Citadel Advisors, Millennium International Management) and BillerudKorsnäs (Citadel Advisors, Albar Capital).
Certain sectors stand out as key names are being shorted by multiple investors. Examples include: gambling, with both Betsson (Keel Capital) and LeoVegas (GSA Capital Partners) noted; retail & supermarkets with names such as Clas Ohlson (Citadel) and ICA Gruppen (Marshall Wace); and construction related stocks such as NCC (Arrowstreet Capital, Millennium International Management), JM (Arrowstreet Capital), and Byggmax (BlackRock).
Other well known businesses being shorted include Ericsson (AQR), Saab (Marshall Wace), Bilia (Marshall Wace), Oriflame (BlackRock), Fingerprint Cards (Citadel Advisors), Munters (Engadine Partners) and Svenska Handelsbanken (AQR).
Near term factors influencing sectors may include the general election taking place to elect members of Sweden’s Parliament on Sunday 9 September. Elsewhere, there are signals that sectors, such as construction, are cooling off – prices for residential units (so-called bostadsrätter) in central Stockholm were down -7% on an annualised basis by the end of August, with the national average down -6%, according to figures from Svensk Mäklarstatistik, which aggregates data from over 5,600 reporting property intermediaries. Central government policy around residential property also stands out as a key difference in the manifestos that have been published ahead of the elections.
For the more globally active businesses, there are likely to be other factors influencing the decisions to borrow stock in the hope that prices will go down rather than up.
Year-to-date, the key OMX30 index of leading stocks traded on the Stockholm Stock Exchange has fluctuated between 1,500-1,650 points. However, over five years the index has climbed from around 1,250 to 1,650, and since 2009 it is up from around 840 points, meaning it has nearly doubled in value.