More short interest in traditional telecoms - Data Explorers
11 November 2011 London
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Short interest is significantly higher among traditional telecoms providers compared to their racy wireless counterparts, writes Data Explorers.
By analysing securities lending flow data, Data Explorers concludes that competition is rife among telecoms as the industry continues to adapt to new technologies, particularly in the wireless communications space, while the companies also relentlessly invest in their networks.
"Although there are some heavily shorted stocks amongst the wireless providers, investors on the long side of the market remain heavily invested in these stocks and the broader sector," the data analytics firm notes.
Mobile payment trends are on the upswing as T-Mobile and Orange announce plans for NFC-enabled phones - which essentially allows contactless mobile payments among other functions - in the first or second quarter next year. Meanwhile, there is unprecedented growth in data hungry apps relying on the high-speed mobile internet. All in all, short sellers are mulling over what these game changers might mean for trading strategies.
Although the telecom sector is not seeing high levels of short interest as a whole, at 3.9 per cent and 1.8 per cent of total shares in the US and Europe respectively, there are a number of heavily shorted names led by by US and Canadian stocks which account for all the top 10 most shorted global telecom stocks.
At the top is Alaska Communication Systems Group, which saw its share price collapse on the back of disappointing earnings and a warning that dividend yields would get cut. Since the start of the year, short interest rallied from eight to 25 per cent of total shares outstanding. Supply has been scarce over the last quarter since most of the lendable supply is out on loan.
By analysing securities lending flow data, Data Explorers concludes that competition is rife among telecoms as the industry continues to adapt to new technologies, particularly in the wireless communications space, while the companies also relentlessly invest in their networks.
"Although there are some heavily shorted stocks amongst the wireless providers, investors on the long side of the market remain heavily invested in these stocks and the broader sector," the data analytics firm notes.
Mobile payment trends are on the upswing as T-Mobile and Orange announce plans for NFC-enabled phones - which essentially allows contactless mobile payments among other functions - in the first or second quarter next year. Meanwhile, there is unprecedented growth in data hungry apps relying on the high-speed mobile internet. All in all, short sellers are mulling over what these game changers might mean for trading strategies.
Although the telecom sector is not seeing high levels of short interest as a whole, at 3.9 per cent and 1.8 per cent of total shares in the US and Europe respectively, there are a number of heavily shorted names led by by US and Canadian stocks which account for all the top 10 most shorted global telecom stocks.
At the top is Alaska Communication Systems Group, which saw its share price collapse on the back of disappointing earnings and a warning that dividend yields would get cut. Since the start of the year, short interest rallied from eight to 25 per cent of total shares outstanding. Supply has been scarce over the last quarter since most of the lendable supply is out on loan.
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