Bets against Hargreaves help take UK shorts to post-Brexit high

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Hargreaves Lansdown is among the out-of-favour stocks contributing to short interest across the FTSE 350 reaching a post-Brexit high.

Currently 9 per cent of its shares are out on loan – an all-time high, IHS Markit reports.

Short interest in the FTSE 350 has jumped 14 per cent year to date to 2.3 per cent of shares outstanding, representing the highest level in two years and above its post-Brexit high.

Domestically-exposed firms continue to dominate top shorts, particularly retailers and services firms, while construction firm Carillion is the most shorted index constituent with 28 per cent of outstanding shares on loan. Its shares slumped by almost a fifth today as it revealed a £1.2bn loss in the first half.

“Hargreaves shares are trading at their highest level in two and a half years, but the elevated levels of short selling could be driven by a desire to play the anticipated market volatility heralded by Brexit uncertainty,” says the IHS Markit report, written by research analyst Simon Colvin.

Odey Asset Management and AQR Capital Management are among the investors with short positions in Hargreaves, according to FCA data. Earlier this year Lindsell Train fund manager Nick Train made a case for Hargreaves in the face of hedge fund shorts.

Pizza firm Domino’s, recently listed pet store Pets at Home and retail freeholder Intu Properties all have more than 10 per cent of their shares out on loan.