Short interest in agriculture surges
14 November 2014 London
Image: Shutterstock
Three years of downbeat commodity prices have seen investors become 鈥渋ncreasingly disillusioned鈥� with agricultural resources, according to research from Markit.
Exchange traded funds (ETF) investors have pulled cash from both commodity and agriculture tracking funds in 2014.
Short interest has surged in tractor maker Deere as well as in a number of food and beverage firms鈥攕ome of which topped Markit鈥檚 global sector Purchasing Managers' Index (PMI).
Research analyst at Markit, Simon Colvin, commented: 鈥淚nvesting in commodities looked set to be a decent hedge against inflation a few years ago which, given the record amount of cash being minted by central banks, weighed on many investor鈥檚 minds.鈥�
鈥淭his rush to hard assets saw record inflows into all aspects of the commodities world, something which was facilitated by advances in the ETF world which opened previously inaccessible markets to any investor with an equity trading account.鈥�
The most shorted firm in Markit鈥檚 research is US listed AGCO, which has 14 percent of its shares outstanding on loan.
The company, which manufactures tractors and combine harvesters under a host of brands, has felt the recent downturn in agriculture 鈥渜uite hard鈥� according to Colvin, and has seen revenue fall by 9 percent year to date from 2013 along with widely eroding margins.
Current short interest represents nearly four times what was seen in January after a severe price fall.
Exchange traded funds (ETF) investors have pulled cash from both commodity and agriculture tracking funds in 2014.
Short interest has surged in tractor maker Deere as well as in a number of food and beverage firms鈥攕ome of which topped Markit鈥檚 global sector Purchasing Managers' Index (PMI).
Research analyst at Markit, Simon Colvin, commented: 鈥淚nvesting in commodities looked set to be a decent hedge against inflation a few years ago which, given the record amount of cash being minted by central banks, weighed on many investor鈥檚 minds.鈥�
鈥淭his rush to hard assets saw record inflows into all aspects of the commodities world, something which was facilitated by advances in the ETF world which opened previously inaccessible markets to any investor with an equity trading account.鈥�
The most shorted firm in Markit鈥檚 research is US listed AGCO, which has 14 percent of its shares outstanding on loan.
The company, which manufactures tractors and combine harvesters under a host of brands, has felt the recent downturn in agriculture 鈥渜uite hard鈥� according to Colvin, and has seen revenue fall by 9 percent year to date from 2013 along with widely eroding margins.
Current short interest represents nearly four times what was seen in January after a severe price fall.
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to 麻豆传媒 Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to 麻豆传媒 Finance Times
