According to Reuters, and in a letter to Financial Services Authority to chief executive Hector Sants, Treasury Committee chairman John McFall said there had been anecdotal evidence that some hedge funds had been short selling UK bank stocks since the ban was lifted on January 16.
Our data reveals that there has been scarce short interest activity among the banned financial stocks as of the close of business on Monday, our most recent data and the most up-to-date data available globally. Moreover, the short position in Lloyds has decreased from 1.27% of its shares outstanding on loan (%SOOL) to 0.88% now. In comparison to HMV’s %SOOL of 22.78% SOOL this is a relatively low figure.
US banking stocks also hold similar short positions, with Citigroup (C), Bank of America (BAC), JP Morgan chase (JPM), State Street (STT) and Wells Fargo (WFC), all having under 2.5% of their SOOL.
Citigroup has seen a rise in short interest since January 12th, from 1.01% SOOL to 1.38% on Monday. JPM has risen from 0.57% to 0.68% in the same time frame. State Street has risen from 0.96% to 1.09%, with Wells Fargo rising from 2.01% to 2.04%.