Short monitor- Fluttering uncertainty and trade unions

Published on 04-11-2019 15:24:47

Top UK Shorts October
Source: Source: Company accounts and Edison Investment Research
FTSE Price vs Number of Shorts (52 Weeks)
Source: Company accounts and Edison Investment Research

 
John Wood Group (WG) was the most shorted stock in October, propelling it to the most shorted stock in our chart. The stock has been near the top of the chart for a while, and has been struggling over the last three months, with the share price falling 31%. New additions to our monthly top 20 list include Royal Mail (RMG) and Flutter Entertainment (FLTR).

Royal Mail has been embroiled in trade union disputes, hoping to avoid nationwide strikes at Christmas, and uncertainty over these disputes will affect the group’s operational performance over the coming months. However, Flutter unveiled a potential £10bn merger with Canadian listed Stars Group (TSGI), making Flutter’s inclusion in October’s top 20 list less clear. That said, the deal is likely to face scrutiny from the Competition and Markets Authority.

On a macro scale, since June 2019, the number of shorts has risen from 176 to 281 (+60%), despite a moderate 2.4% increase in the FTSE 350’s price. As there is typically an inverse relationship between the price of the FTSE and the number of shorts, the growth in the number of shorts could be signalling investor uncertainty regarding UK equities.

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