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Hedge funds increase shorts on ITM Power in July

Hedge funds increase shorts on ITM Power in July

ITM Power LON:ITM remained the top shorted stock on the London market in July, with funds starting to increase their short positions again.

Although total short interest on the stock had decreased somewhat during 1H of this year, Helikon Investments disclosed this week that it had increased its short position in ITM Power.

Shares in ITM Power have been on the move recently, up over 17% in the last month. This will be putting pressure on those funds with open short positions, and we’d expect some of these to be closed if the share price continues to rise.


Optimism was returning to the stock following the news that ITM Power had been awarded a contract for the procurement of materials needed for a 100 MW project in Germany.

This will be the third 100 MW project ITM Power has been asked to execute. It comes against the backdrop of more appetite for stocks in the green energy sector among investors.

Funds also short on Kingfisher stock

Other favoured shorts in London at the moment include Kingfisher Plc LON:KGF, which many fund managers regard as a good proxy for the struggling UK property market, and Keywords Studios Plc LON:KWS.

AKO Capital increased its short position in Kingfisher Plc earlier this month.

Hedge funds have, however, been lobbying hard behind the scenes to get the regulator to drop the compulsory disclosure of short positions on UK stocks. The FCA last week said it was raising the level at which short sellers would need to publicly disclose their short positions, narrowing an interesting window on the activities of short sellers in the UK.

Under the previous rules, short sellers needed to disclose short positions over 0.1% of borrowed stock, but this is now being raised to 0.2%. The FCA said the move was part of the wider repeal of EU legislation in the UK, and the reworking of the Financial Services and Markets Act.

The changes will not affect large and aggressive short sellers however. For example, Helikon Investments has a declared 3.27% short position on ITM Power.

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This article does not constitute investment advice.  Do your own research or consult a professional advisor.

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