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Money managers under the microscope

Short-sellers move in on the banks

August 13, 2010

The short-sellers are targeting bank stocks again.

Ok, it certainly isn’t on the scale seen in 2008, when hedge funds made small fortunes from the demise of Northern Rock and the like.

But it is interesting to note that after what could be termed a wave of good news — most banks passing the stress tests, a bumper earnings season and the easing of Basel III rules — some managers remain sceptical.

The European banks sector has come off 4-month highs seen earlier this month, meaning this could already be paying off for some funds.

However, hedge funds are cautious at the moment and are careful not to take on positions that are too large. Choppy markets have already whipsawed a number of long-short equity funds and many will be hoping simply to see out the summer and put on bigger bets when they feel more confident.


Bank short interest is now very low by historical standards. Which sectors do you feel are now the key targets for shorters?

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