Click on our Secret Library of Evidence ------>

    BANKILEAKS Secret Library

Loan Application Forms (LAF's)  

    Bank Emails to Brokers  

    Then Click on 'VIEW NOTEBOOK'

Join us on facebook

facebook3           facebook2 


What BFCSA Does...

BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


Articles View Hits

Whistleblowers' Corner!

To all mortgage brokers, BDMs and loan approval officers! 
Pls Call Denise: 0401 642 344 

"Confidentiality is assured."

Cartoon Corner

Lighten your load today and "Laugh all the way to the bank!"

Denise Brailey

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

Click on the Cluster Map.

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Login
    Login Login form

BFCSA: Hedge funds sell and short banks ahead of banking royal commission final report

  • Font size: Larger Smaller
  • Hits: 1070
  • Print

Hedge funds sell and short banks ahead of banking royal commission final report

Australian Financial Review01 Feb 2019 11:57 AM

James Frost


Bank stocks stumbled on Friday as hedge funds and international investors bet the publication of Commissioner Ken Hayne's final recommendations would provide a catalyst for further falls.

Photographs released by the Governor-General Sir Peter Cosgrove at midday on Friday show Commissioner Hayne delivering three-volumes – about the size of a phone book – to Government House alongside the royal commission's CEO Toni Pirani.

As speculation about the contents of the report intensifies ahead of its release to the public on Monday afternoon, analysts at Macquarie say the size of the bets being made against the banks by institutional investors have been ramped up significantly since the start of October.

Analysis shows international speculators expecting sweeping and punitive changes have upped the ante with short bets against the banks rising 60 per cent over the last three months of 2018, with $5.3 billion of big four bank shares being shorted on December 31, up from $3.3 billion on September 30. Short sellers profit from falling share prices by selling borrowed shares and buying them back at lower prices.

Macquarie says that Commonwealth Bank is the most heavily shorted of the big four banks with 2 per cent of issued stock held by short sellers. Across the big four banks 1.5 per cent of issued stock has been shorted compared with a long-term average of 1 per cent.

CBA's gross shorts as a percentage of daily volume reached 75 per cent on Thursday. On the same day ANZ's gross shorts as a percentage of daily volume was 41 per cent, NAB's was 55 per cent and Westpac's reached 51 per cent.

After shedding about 1 per cent each on Thursday, bank stocks eased at the open and continued to fall until they staged a late-afternoon recovery. At the close on Friday ANZ was down 0.4 per cent, CBA was down 0.2 per cent and NAB was down 0.3 per cent. Westpac bucked the trend after spending the morning in the red and closed up 0.1 per cent.

Struggled to gain traction

Macquarie's analysts, however, see a silver lining in the build up in short interest, explaining that a benign final report from Commissioner Hayne may result in a short squeeze or spike in share prices, as speculators who are short the stock are forced to buy it back during a rally, sending prices even higher.

Data collected by Macquarie shows that domestic institutions and retail investors have been net buyers of bank stocks at the same time as offshore investors sold or went short. Local institutions have loaded up on CBA and to a lesser extent NAB, potentially for the sector-leading dividend yield of 11.8 per cent grossed up for franking.

Offshore investors have been harder to lure in and have been net sellers of Australia's big four bank stocks, with NAB being the bank stock most sold by overseas funds. Overseas funds have also sold off ANZ and CBA while being net buyers of Westpac.

Macquarie says that the bank's share prices have been supported by its private shareholder base with retail shareholders moving from net sellers in the September quarter to net buyers in the December quarter.

NAB shares saw the most buying of the big four according to Macquarie, with retail investors also prepared to shell out for regional bank stocks such as Bendigo and Adelaide Bank and Bank of Queensland.

Shares in NAB have been the most heavily sold off of the big four banks over the last 12 months as its reputation took a battering at the Hayne royal commission and its strategy to slim down and simplify the bank struggled to gain traction. NAB shares are down 23 per cent from their 52-week high.

Westpac, which has stated that it remains wedded to its troublesome financial advice business while its rivals have moved to sell theirs, is right behind NAB in the sell-off stakes with its shares 22 per cent off its year highs. ANZ, meanwhile, is 18 per cent lower and CBA is just 14 per cent lower.

Outside the big four banks, AMP is one of the more heavily shorted financial stocks with 45.5 per cent of daily trading volume shorted on Thursday. AMP rose 0.9 per cent in early trade on Friday, but by the close it was down 0.9 per cent. AMP is down 59 per cent from its 12 month high.



Last modified on
Rate this blog entry: