Ireland had greatest short exposure in Europe in October

Ireland had the most significant short exposure of any European country in October, according to SEI Novus monthly pan-European short position data.

The data conveys publicly available aggregated European short positions from all ESMA-regulated countries and the UK. It covers over €30 billion in short positions from more than 150 managers.

Ireland had the greatest short exposure over the month at 46.29%, followed by France with 11.65% and the UK with 10.78%.

While Ireland had traditionally maintained a low exposure of below 1% throughout 2021 with an increase in May 2022, where it stayed below 5% until September 2022, exposure increased on 3 October to 44.73%.

It remained above 43% until the end of the month, climbing to 46.29% on 31 October.

Elsewhere, France’s exposure increased markedly over the month, climbing from 7.02% on 30 September to 11.65% on 31 October.

On a sector basis, consumer discretionary stocks were the most shorted in October, ending the month accounting for 54.51% of total short activity in Europe, up from 17.72% a month prior.

The second most shorted sector was manufacturing, which accounted for 11.68% of registered European short positions, down from 24.47% in September.

Michelle Silsbe, director at SEI Novus, said: “The data from the month points to managers significantly changing their shorting strategy as they look for ways to generate strong and consistent returns as the economy continues to slow.

“October saw consumer discretionary stocks become the most shorted stocks…Strong short interest across Europe reflects expectations among managers that equity markets will continue to face headwinds as markets contend with rising rates, persistent inflation and the ongoing war in Ukraine.”

The UK has consistently been among the top three countries with the greatest short exposure since February 2022, though its exposure had declined from 20.2% at 30 September and 23.46% at 31 August.

© 2022 funds europe

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