Brexit sparks spike in short-selling shares

  • By Sophia Anwari

Brexit trauma has prompted the largest bet against UK shares in years official figures have shown

Fiscal data firm Markit says 2.3% of shares in the UK’s 350 biggest quoted companies are currently on loan with short-sellers, who sell stocks in the anticipation that they will be able to buy them back at a cheaper rate in the future making a profit.

In essence investors are expecting the UK economy and businesses to continue to fail at an accelerating rate.

Markit adds that the top 250 companies in the UK which are primarily domestically focused have been disproportionately targeted by the shorters. Demands to borrow shares in FTSE 250 stocks have jumped by a third.

Analyst Simon Colvin said shorting fees had jumped by more than $35m USD (aprox £28m GBP) over the year, representing a 27% rise on 2015.

Colvin added:

“Uncertainty surrounding Brexit has been the main catalyst driving the increased UK revenues as short selling in UK equities has surged to a multi-year high since the referendum vote back in June. These dynamics show no signs of slowing down heading into 2017”.

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