Short sellers target Chinese automobile industry
09 September 2015 London
Image: Shutterstock
China’s ongoing financial woes have led short sellers to target struggling Chinese automobile stocks, according to Markit.
The financial data provider points to the combination of a slow-down in emerging markets and a strong US dollar (USD) as the main drivers behind the sharp price drops.
Automobile companies across the board witnessed growing interest from short sellers, regardless of individual sales figures.
Disappointing Chinese sales figures exposed Daihatsu and Peugeot to increased short selling activity, while, at same time, strong growth in China could equally not protect Tesla, which was the most short sold automaker globally.
Harley Davidson saw shorting interest in its stocks rise to a five-year high with 9.5 percent of shares outstanding.
The American motor company suffered the consequences of a strong USD in Q2 2015 as its import competitors discounting aggressively in it core market in the US representing 65 percent of sales.
The company’s only Q2 sales growth was in Asia Pacific.
Data provided by Markit PMI showed an 17-month low in vehicles sales for China while global automobile and auto parts sector also endured the first monthly drop in output this August since June 2013.
It hasn’t all gone the short sellers way, however, as they were unable to capitalise on a 60 percent drop in Great Wall Motor Company, likely due to short selling restrictions.
The financial data provider points to the combination of a slow-down in emerging markets and a strong US dollar (USD) as the main drivers behind the sharp price drops.
Automobile companies across the board witnessed growing interest from short sellers, regardless of individual sales figures.
Disappointing Chinese sales figures exposed Daihatsu and Peugeot to increased short selling activity, while, at same time, strong growth in China could equally not protect Tesla, which was the most short sold automaker globally.
Harley Davidson saw shorting interest in its stocks rise to a five-year high with 9.5 percent of shares outstanding.
The American motor company suffered the consequences of a strong USD in Q2 2015 as its import competitors discounting aggressively in it core market in the US representing 65 percent of sales.
The company’s only Q2 sales growth was in Asia Pacific.
Data provided by Markit PMI showed an 17-month low in vehicles sales for China while global automobile and auto parts sector also endured the first monthly drop in output this August since June 2013.
It hasn’t all gone the short sellers way, however, as they were unable to capitalise on a 60 percent drop in Great Wall Motor Company, likely due to short selling restrictions.
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