Hong Kong shorting gets pricey
06 September 2012 London
Image: Shutterstock
Markit Securities Finance has released a report that indicated the high cost of short selling in Hong Kong.
In a blog post, Will Duff Gordon, research director at Markit, said: “If you thought, like me, that the cost of short selling in Hong Kong could not get any higher since a year ago then you are wrong.
“Admittedly, this rise in the cost of borrowing plateaued over the last few months but this was after a continued rise for nine consecutive months as the chart below shows.”
He stated that the number of shares on loan in Hong Kong for more than 500 basis points have increased from 13 percent of securities to 21 percent, compared to just 2 percent in Japan.
In a blog post, Will Duff Gordon, research director at Markit, said: “If you thought, like me, that the cost of short selling in Hong Kong could not get any higher since a year ago then you are wrong.
“Admittedly, this rise in the cost of borrowing plateaued over the last few months but this was after a continued rise for nine consecutive months as the chart below shows.”
He stated that the number of shares on loan in Hong Kong for more than 500 basis points have increased from 13 percent of securities to 21 percent, compared to just 2 percent in Japan.
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