Monthly Prime Brokerage reports from both Deutsche Bank and JPMorgan noted the increasing hedge fund short interest in the Taiwanese cellular phone company, HTC Corp (TPE:2498). In the last month, PB clients added up their short bets in the company after HTC released weaker forward guidance for Q3.
HTC Corp, other Taiwanese tech companies see increased short interest
Other Taiwanese tech companies also remained under pressure; a negative outlook on laptop computers increased the already high short interest in Acer Incorporated (TPE:2353), and shorts up by 17 percent. Wistron Corporation (TPE:3231) is up by 29 percent and ASUSTEK Computer Inc. (TPE:2357)’s short interest increased by 4 percent, according to Deutsche Bank’s Markets Prime Finance Monthly Trends report.
Emerging markets faced heightened outflows as fears of end of QE increased in the U.S.
Taiwanese equity markets slipped by -1.06 percent in the last month.
Japanese markets softened in August
At the same time in Japan, the dazzling effects of Abenomics have somewhat slowed now, and Nikkei was down 2.04 percent in August. JPMorgan’s Prime Brokerage monthly noted an increase in short interest in Gree, Inc. (TYO:3632), DeNA Co., Ltd. (TYO:2432) and GungHo Online Entertainment, Inc. (TYO:3765).
Take a look at Citi’s negative outlook on the Japanese construction industry.
On the other hand, Deutsche Bank noted an 8 percent increase in borrow interest in Tokyo Electric Power Co Incorporated (TYO:9501), which is now up to 37.5 million shares. Tokyo Electric Power was once again marred by the news of active leaks at the Fukushima Plant which drove down its stock price by -22 percent. DB also points out the possibility of a downgrade from The Nuclear Regulation Authority of Japan amid these problems. Positive news for Tokyo Electric Power is that it has put up its property for sale in Tokyo, Ginza which will bring a gain of $24 million.
Japan’s near-term future hinges on the possible consumption tax hike, which investors fear will impede the already fragile recovery in Japan. Japan reported annualized economic growth of 2.6 percent in Q2 which was below market expectations of 3.6 percent. Long/Short equity strategies in Japan are still up 17.55 percent YTD, the highest gain across the globe.