Bridgewater, Millennium, and Marshall Wace in bearish bet on Europeans banks (updated)

Citadel Income Fund

16/03/2023 16:24

(Adds quotes in 7th paragraph, more short sellers named,
updates share price moves)
    By Nell Mackenzie and Pablo Mayo Cerqueiro
       LONDON, March 15 (Reuters) - Investment managers
Bridgewater Associates, Millennium Management and Marshall Wace
added to short positions on European banking shares after the
collapse of Silicon Valley Bank sparked contagion fears across
global banks, according to data from Breakout Point.
    Hedge funds including Citadel, Wellington Management,
Capital Fund Management and Odey Asset Management already had
short positions, some long-standing, disclosed as of Feb. 15,
said the data provider on Thursday.
    Short selling involves borrowing shares from a broker to
sell them, with the expectation of buying them back at a lower
price to make a profit. 
    Short sellers had amassed bearish positions worth more than
$15.7 billion against European banks by Tuesday, according to
S&P Global Market Intelligence.     
    Millennium Management, Citadel, Wellington Management,
Capital Fund Management, Odey Asset Management and Marshall Wace
declined to comment. Bridgewater Associates said it would
respond in due course. 
    Marshall Wace held the largest disclosed number of short
positions against banks, public filings from Austria, Italy,
Sweden, Britain, Spain and Poland analysed by Breakout Point
showed. The banks included BAWAG  BAWG.VI , FinecoBank  FBK.MI ,
Handelsbanken  SHBa.ST , CaixaBank  CABK.MC , NatWest Group
 NWG.L  and PKO Bank Polski  PKO.WA . 
    "With six big shorts, Marshall Wace holds, by far, the most
disclosed banking shorts across Europe. They boosted a number of
these shorts in recent weeks, generating some nice profits at
their side," said Ivan Ćosović, founder of data group Breakout
Point. 
    Handelsbanken, Mediobanca  MDBI.MI , BNP Paribas  BNPP.PA ,
Credit Suisse  CSGN.S , Close Brothers  CBRO.L , Deutsche Bank
 DBKGn.DE  were among financial firms that ended Tuesday with
the highest proportion of shares on loan to short sellers,
according to S&P Global Market Intelligence. 
    The 113 lenders tracked by the researchers saw an average
increase of 5% of shares out on loan between March 10 and 14.
    The data did not cover the plunge in Credit Suisse shares on
Wednesday. 
    Traders with short positions on Credit Suisse could
potentially have made month-to-date profits of up to $238.6
million and year-to-date profits of up to $192.4 million, data
provider S3 Partners said on Wednesday, when the Swiss group's
shares plunged by as much as 30% after its top shareholder said
it could not inject more capital into the bank.
    Credit Suisse sought to shore up its liquidity and restore
investor confidence on Thursday by borrowing up to $54 billion
from Switzerland's central bank. Its shares were up 18% at 1602
GMT, in a broader European banking index  .SX7P  up 1.4% 
    In the week to Wednesday, some 120 billion euros had been
wiped off the value of European bank shares.
    The rout began after Silicon Valley Bank was forced to sell
a portfolio of bonds at a loss to meet the demands of its
customers who wished to withdraw funds, prompting fears of a
liquidity crunch at other financial institutions. 
    ($1 = 0.9501 euros)

 (Reporting by Nell Mackenzie; Editing by Amanda Cooper and Mark
Potter)
 ((Nell.Mackenzie@thomsonreuters.com;))