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Short-selling disclosure dents Royal Mail
Bets against Royal Mail have backfired in spectacular fashion over recent years, but that’s not deterred one hedge fund from having another go.
Disclosures show that Marshall Wace has taken a short position of five million shares, equivalent to 0.5% as it eyes the company’s turnaround running out of steam.
Royal Mail has seen off the hedge funds once before, having benefited from the pandemic surge in parcel deliveries and the support of major shareholder Daniel Kretinsky.
A £200 million special dividend and buyback programme has just fired shares over 500p but the stock fell back 4% or 18.6p to 507.6p today amid jitters over the short position.
Royal Mail topped the FTSE 100 fallers board, but there was better news for the holders of two other popular stocks.
BT shares rose by a penny to 179.15p after UBS analyst Polo Tang removed his “sell” recommendation. Rising broadband infrastructure competition for Openreach remains a worry, however, as Tang pegged his new price target at 170p.
Lloyds Banking Group shares also benefited from broker comment today, lifting 0.3p to 54.3p after Investec’s Ian Gordon predicted further upside for the shares.
The lender is now at a 22-month high after a strong start to the year, but Gordon thinks they deserve to be at 60p. As well as the margins boost from higher interest rates, he sees the potential for £1 billion a year of share buybacks through to 2024.
The FTSE 100 index fell 6.80 points to 7557.06 as Thursday’s big reversal for Wall Street’s Nasdaq put pressure on Scottish Mortgage Investment Trust and other tech-focused plays.
Housebuilder Berkeley was one of the biggest risers after Deutsche Bank switched its recommendation to “buy” and moved its price target to 5429p, helping shares to rise by 65p to 4551p.
Deutsche Bank is more cautious on other housebuilders, however, with sector heavyweight Persimmon losing its “buy” rating.
The FTSE 250 index fell 50.66 points to 22,907.85, amid a further 4% reversal for Marks & Spencer shares after yesterday’s trading update ended a strong run for the retailer.
Cineworld shares were steady at 38.85p after the UK and US-focused operator reported a strong December, with “Spider-Man: No Way Home” the first film to gross more than $1.5 billion (£1.1 billion) since the pandemic started.
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