Taiwanese tech companies look shaky
27 August 2015 London
Image: Shutterstock
The turmoil in Asian financial markets has prompted short sellers to target Taiwan’s technology companies, according to Markit Securities Finance.
The three most shorted stocks in the region are technology firms, with the sector’s average short interest rising by 10 percent since the beginning of July.
Hardware manufacturer Acer is attracting the most interest. Shares outstanding on loan have increased to 8.9 percent. With 70 percent of available shares short sold, the cost to borrow the stock remains high.
In the semiconductor sub-sector, the second most shorted in the region is Epistar, which manufactures LEDs. Shares outstanding on loan have jumped in recent weeks to 8.6 percent, a 52-week high.
Smartphone manufacturer HTC, meanwhile, has seen its stock fall 71 percent in the last six months, with short sellers covering positions by a half during the same period.
“The struggling handset maker has battled against an incredibly competitive Asian market that has reached signs of saturation with signs of demand slowing down,” explained Markit analyst Relte Schutte.
Markit has also witnessed short sellers use the iShares MSCI Exchange-Traded Fund (ETF) to efficiently short the Taiwan market, “a similar trend to that seen in China”.
The number of shares out on loan for the ETF currently stands at 9.6 percent, declining by 22 percent in the last month as its net asset value fell 15 percent over the same period.
The three most shorted stocks in the region are technology firms, with the sector’s average short interest rising by 10 percent since the beginning of July.
Hardware manufacturer Acer is attracting the most interest. Shares outstanding on loan have increased to 8.9 percent. With 70 percent of available shares short sold, the cost to borrow the stock remains high.
In the semiconductor sub-sector, the second most shorted in the region is Epistar, which manufactures LEDs. Shares outstanding on loan have jumped in recent weeks to 8.6 percent, a 52-week high.
Smartphone manufacturer HTC, meanwhile, has seen its stock fall 71 percent in the last six months, with short sellers covering positions by a half during the same period.
“The struggling handset maker has battled against an incredibly competitive Asian market that has reached signs of saturation with signs of demand slowing down,” explained Markit analyst Relte Schutte.
Markit has also witnessed short sellers use the iShares MSCI Exchange-Traded Fund (ETF) to efficiently short the Taiwan market, “a similar trend to that seen in China”.
The number of shares out on loan for the ETF currently stands at 9.6 percent, declining by 22 percent in the last month as its net asset value fell 15 percent over the same period.
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