Stock borrowing in the FTSE 250 continues to outstrip the FTSE 100, a trend which began in July 2007 and shows no signs of abating (click on the attached chart for details.) In July 2007, 4.2% of the Market Cap (%MCOL) of the FTSE 100 and FTSE 250 was on loan but since then, lending in the FTSE 250 has risen to 6.6% while lending in the FTSE 100 has fallen slightly and currently stands at 4.06%
These figures would suggest that there is very little sign of midcaps coming back into favour any time soon. Lending in the FTSE 100 has picked up in 2008, but not as fast as the FTSE 250.
In the US, mid and smallcaps (as represented by the Russell 2000) still show considerably higher levels of borrowing than the S&P 500 which we first reported back in July 2007. In the Russell 2000, we saw Utilisation levels rise from 27% in February 2007 to 38% in August. But since then, Utilisation levels have fallen slightly to just under 35%. In the S&P 500, Utilisation levels have oscillated between 6% and 8% during the same period. However, since Jan 1st 2008 utilisation levels in the S&P 500 have risen from 6.2% to 7.35%. Utilisation in the Russell 2000 has remained flat during this period.
To summarise, stock borrowers have been increasing their positions in UK mid- and largecaps and US largecaps, but not the Russell 2000 in 2008. (AH)