Struggling Cineworld leads the list of 10 most shorted UK stocks
Investors have taken big bets against cinema group Cineworld and energy firms Premier Oil and Tullow Oil, with Blackrock taking the highest number of short positions in the UK market, new analysis has shown.
Behind Cineworld, Premier and Tullow, the most shorted stocks as of 12 November included oil services firm Petrofac, lender Metro Bank and publisher Pearson, exclusive analysis for Morning Wire by exchange-traded fund provider Granite Shares showed.
The big bets against sectors hit hard by the coronavirus pandemic indicate that many investors think there is more pain yet to come for the UK economy.
Britain’s FTSE 100 has risen sharply in November on the back of positive vaccine news. But many analysts warn there is a tough winter of rising coronavirus cases and new restrictions ahead.
Granite Shares’s analysis showed that investment giant Blackrock held the highest number of short positions, at 23. GLG Partners, AQR Capital and Marshall Wace held 22, 13 and 12 respectively.
The top 10 most shorted stocks
| Company | Stock held short | Number of funds shorting |
| Cineworld Group | 9.51% | 10 |
| Premier Oil PLC | 9.14% | 3 |
| Tullow Oil PLC | 8.87% | 6 |
| Petrofac Ltd | 8.42% | 4 |
| Metro Bank PLC | 7.46% | 4 |
| Pearson PLC | 7.43% | 7 |
| Sainsbury (J) PLC | 6.95% | 5 |
| Hammerson PLC | 6.85% | 5 |
| Rolls-Royce Holdings PLC | 5.86% | 6 |
| Petropavlovsk PLC | 5.53% | 2 |
A “short” is a method of betting against a stock, so that the investor can make a profit if the share price falls.
Investors borrow stocks and then sell them at market price. If they have fallen in price before the investor is due to buy back the shares and return them, they will have made a profit.
The analysis showed that 9.5 per cent of Cineworld’s stock was held short as of last week. The cinema chain has suffered during the UK’s two lockdowns, with the number of Britons going to watch films plummeting.
Investors held 9.1 per cent of Premier oil stock short, and 8.9 per cent of Tullow Oil stock.
Which fund managers hold the most positions?
| Fund manager | Number of short positions |
| BlackRock Investment Management (UK) Limited | 23 |
| GLG Partners LP | 22 |
| AQR Capital Management, LLC | 13 |
| Marshall Wace LLP | 12 |
| Citadel Europe LLP | 11 |
| Citadel Advisors LLC | 9 |
| JPMorgan Asset Management (UK) Ltd | 9 |
| ODEY ASSET MANAGEMENT LLP | 7 |
| AHL Partners LLP | 6 |
| Ennismore Fund Management Limited | 6 |
Will Rhind, Granite Shares chief executive: “There is no sign that the heightened levels of volatility that we have seen this year will dissipate any time soon.
“Investors’ response to news is rapid, think of the price moves we saw on the back of the Pfizer vaccine announcement on 9 November.
“There are any number of potential catalysts for the next move up or down, whether it is an EU-UK trade deal, yes or no, the smoothness of the US presidential transition, or potentially the impact of Tesla’s addition to the S&P 500 in December.”