7 Most shorted stocks on ASX

  • Dec 16, 2019 AEDT
  • Team Kalkine
7 Most shorted stocks on ASX

A couple of weeks ago, we had covered a topic on short selling and short interest and in this article, we would be looking at the seven ASX listed stocks that were most shorted on ASX, as on 10 December 2019.

Below is the list of seven ASX listed stocks provided by ASIC that are amongst the most shorted stocks.

Before covering these seven stocks, let’s understand the concept of short selling.

Short selling is an trading strategy in which an investor first analyses the market, and in case he/she feels that the price of the stock might fall next, the investor would borrow the stock from one of the holders of the stock in the market, then sell the stock in the market at the prevailing price. The arrangement of the buyer and lender is facilitated by the brokers. The funds raised by selling the stock will be used to repurchase the same stock from the market at a lower price and return them to the holder of the stock. Let’s simplify this concept through a pictorial description given below:

Galaxy Resources Limited (ASX: GXY)

As per the report released by ASIC on 10 December 2019, ~ 17.304% of the total product was shorted. The shares of GXY have generated a negative return of 35.93% in the last six months.

On 13 December 2019, Galaxy Resources Limited released an announcement where it highlighted that the company was removed from the S&P/ASX 200 Index which might have influenced the investors negatively.

By the end of day’s trading on 16 December 2019, the GXY shares closed at $0.935, down 1.058% from its previous closing price.

Orocobre Limited (ASX: ORE)

As per the report released by ASIC on 10 December 2019, ~ 13.904% of the total product was shorted. The shares of ORE have generated a negative return of 15.89% in the last six months.

In Q1 FY2020, the company reported a 35% growth in its production following the strategy of handling brine quality, new pond preparation, as well as customising production to cyclical conditions. However, the quarterly sales revenue declined by 21% on QoQ, with an achieved avg. price of US$7,111/tonne on FOB or free on-board basis. Gross cash margins apart from export tax decreased by 40% to US$2,226/tonne because of the lower average price received.

Cash costs during the quarter rose by 9 percent quarter on quarter basis, which excludes the export tax of US$420/t valid since September last year.

The company also highlighted in the announcement that it expects the average sales price in the December quarter to be in between approx. US$6,200 - US$6,500/tonne.

However, on 3 December 2019, it provided an update on its December Quarter 2019 lithium carbonate pricing guidance to be ~ US$5,400/tonne FOB depending on attaining the planned shipping schedule.

ORE shares by the closure of the market on 16 December 2019, was at $2.73, up 1.111% from its previous close.

GWA Group Ltd (ASX: GWA)

According to the report released by ASIC on 10 December 2019, ~ 14.755% of the total product of GWA were shorted. The shares of GWA have generated a negative return of 7.38% in the last six months.

Recently, the company released an announcement related to the notice of ceasing to be a substantial holder, wherein it was mentioned that Mitsubishi UFJ Financial Group, Inc. has ceased to be a substantial holder in GWA Group Ltd.

GWA shares by the closure of the market on 16 December 2019, was at $3.420, up 0.885% from its previous close.

Syrah Resources (ASX: SYR)

As per the report released by ASIC on 10 December 2019, ~15.83% of the total product of SYR were shorted. The shares of GWA have generated a negative return of 54.95% in the last six months

As per the market release provided by the company on 15 November 2019, Credit Suisse Holdings (Australia) Limited became the substantial holder of 22,155,144 common stock with 5.36% voting power. Later as per the announcement on 19 November 2019, Credit Suisse Holdings (Australia) Limited ceased to be the substantial holder in the company.

Again, on 22 November 2019 Credit Suisse Holdings (Australia) Limited became the substantial holder in SYR with 21,637,108 common stock with 5.23% voting power.

On 13 December 2019, SYR reported a change in the interest of its substantial holder Bank of America Corporation and its related bodies corporate. Previously, Bank of America Corporation and its related bodies corporate had 21,989,878 person’s votes with 5.32% voting power. Now it has increased to 32,063,717 ordinary shares with 7.75% voting power.

SYR shares by the closure of the market on 16 December 2019, was at $0.450, down 4.255% from its previous close.

Inghams Group (ASX: ING)

According to the report released by ASIC dated 10 December 2019, ~ 13.74% of the total product of SYR were shorted. The shares of ING have generated a negative return of 18.69% in the last six months

Inghams Group reported a decline in the substantial holding of TPG Adams Co-Invest, L.P from 19.73% to 14.86%. TPG Adams Co-Invest, L.P earlier held 73,827,665 shares in the company, and now it holds 55,243,685 shares.

On 10 December 2019, Legg Mason Asset Management became the substantial holder, holding 19,430,331 shares with 5.23% voting power.

ING shares by the closure of the market on 16 December 2019, was at $3.490, up 0.287% from its previous close.

Speedcast International Limited (ASX: SDA)

As per the report released by ASIC on 10 December 2019, ~ 13.54% of the total product were shorted. The shares of SDA have generated a negative return of 79.20 in the last six months.

On 13 December 2019, Speedcast International Limited released an announcement where it highlighted that the company was removed from the S&P/ASX 200 Index which might have influenced the investors negatively.

On 10 December 2019, the company reported a decline in the interest in the substantial holding of Southeastern Asset Management, Inc from 19,314,493 (voting power 8.06%) to 14,521,120 (voting power 6.06%). On the same date, the company reported that Southeastern Asset Management, Inc ceased to be a substantial holder in the company.

SDA shares by the closure of the market on 16 December 2019, was at $0.760, up 0.662% from its previous close. The stock last traded near to its 52 weeks low price.

JB HI-FI Limited (ASX: JBH)

According to a report released by ASIC on 10 December 2019, ~ 11.742% of the total product was shorted. The shares of SDA have generated a decent return of 40.11% in the last six months. The shares last traded price has reached near to its 52-week high price of $38.85.

Recently, UBS Group AG became a substantial holder in the company, by holding 5,942,079 shares with 5.17% voting power.

SDA shares by the closure of the market on 16 December 2019, was at $38.600, up 2.988% from its previous close.


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