Housebuilder Barratt has entered the list of the top 10 most shorted companies in the UK, despite Labour’s plans to get the country building.
Yesterday, new Chancellor Rachel Reeves unveiled a raft of planning reforms in a bid to “get Britain building again”, and shares in the country’s biggest builders immediately responded positively.
However, it seems that traders don’t believe the bounce will last long for Barratt.
According to data compiled by Graniteshares, a global issuer of Exchange Traded Products (ETPs), 3.8 per cent of the shares were out on loan to short sellers at the end of the day on 8th July. It was the tenth most shorted company in London.
Barratt is due to make a trading announcement tomorrow. Analysts expect operating profit to more than halve from £863m to £357m for the year, thanks to higher interest rates and inflationary pressures.
Meanwhile, its merger with rival housebuilder Redrow is being held up by the Competition and Markets Authority over fears it may damage competition.
Since the start of 2024, shares in Barratt have fallen nine per cent as the value of its peers has soared.
Competitor Vistry has seen its share price surge more than 40 per cent.
The second most-shorted stock on the list was Petrofac, with 9.9 per cent of its shares out on loan to short sellers. It has been one of the UK’s most hated stocks for months.
Meanwhile, Diversified Energy, a gas and oil production company in the US, has shot up to the second spot from seventh in April after two funds initiated new short positions against it.
Ocado’s weighting has also increased, rising from 6.3 per cent in April to 7.2 per cent today, after the grocery delivery company fell out of the FTSE 100.
Will Rhind, founder and CEO of Graniteshares, noted that retailers were especially prevalent on the list, accounting for half of the top 10.
Other returning highly shorted stocks on the list include Abrdn, ASOS, Boohoo, Burberry and B&Q owner Kingfisher.
Hargreaves Lansdown had been a perennial victim of the top shorted list, with it having 5.6 per cent of its stock shorted in April.
However, with the platform now mulling a CVC-backed taekover, share price has skyrocketed more than 50 per cent this year.
CompanyPercentage of stock shortedNumber of funds shortingPetrofac9.96Diversified Energy7.78Ocado7.26ASOS5.67Kingfisher5.65Abrdn5.66Boohoo4.34Burberry4.23Alphawave4.25Barratt3.85Source: Graniteshares