Thursday, 22 November 2012


For the first time an EU ruling made sense. The EU ruled from 1 November the Financial Service Authority has to disclose any shortening by Hedge funds.

The scale of short-selling by Hedge funds has been made public for the first time. This occurs when Hedge funds bet on a company’s share price falling. As before it was a very secretive Hedge fund bet on shares falling and shorting by borrow shares and sell them hoping they can buy them back at a lower price which will give them a profit.

Another fiddle disclosed. We had the Libor scandal and hope this had been regulated now. We had the tax avoidance scandal and now the Hedge fund bets scandal.

Shares of about 150 companies are on the list of around 50 funds which were shortened.

The bets adding to hundreds of millions of pounds and right across the whole industries which include builder Barratt, online grocer Ocado, web retailer Asos, insurer Admiral, Marks & Spencer and bookmaker William Hill to name but a few.

The biggest short position in per centage of market value is fund manager David Einhorn’s Greenlight Capital against Daily Mail & General Trust.  His 4.4 per cent against DMGT amounting to £80million. DMGT is the owner of Daily Mail and Sunday Mail.

Under the new EU ruling the FSA will have to publish short positions above 0.5 per cent of a firm’s market value.

The banks and finance sector have a lot to answer for the crisis of the economy. It is high time they are going to be regulated again. It only came about after Margaret Thatcher de-regulated the banks and Finance.  The disclosure due to the new EU rules shows and proves creamed off hundreds of millions of pounds.

There again the government should have stepped in much earlier and stopped it instead of cutting ordinary people’s benefits which surely don’t add up to half of these amounts.


No comments:

Post a Comment