Hedge fund activity in the Netherlands

Demand to borrow Dutch equities declined over 2011 and currently stands at USD 6.3 billion, just 10% above the annual low. While average short interest is only 1.83%, there are a number of heavily shorted stocks and others seeing rising levels of short interest.

Stocks include: Imtech N.V. (AMS:IM), Vistaprint NV, TomTom NV (AMS:TOM2), Unilever N.V. (AMS:UNA) and PostNL NV (AMS:PNL).

Most shorted

The most shorted Dutch stock is Vistaprint NV. The online marketing product and services provider continues to see short interest reach new unprecedented highs despite a scarcity in lendable supply. Short interest currently stands at 25% of total shares, whilst the share price remains weak. Institutional investors who lend reduced holdings to annual lows in November but have returned to investing in this stock. They now hold a quarter of the market cap’.

TomTom NV has fallen further down the leader board of most shorted stocks to fifth place with 9% of its total shares out on loan. After a period of rapid short covering in the third quarter, short sellers returned as the share price improved. A large proportion of the lendable supply remains out on loan as holdings of institutional investors who lend continues to track at annual lows of less than a tenth of the market cap’.

Short interest in Unilever stands at 4% of total shares – over double the national average. It has crept up gradually throughout the year from lows of 2% observed in June which contrasts against the rising share price that reached new annual highs at the start of 2012.

Largest increase in short interest

The table below lists those names which have seen the largest increase in short interest over the past quarter. Imtech NV tops the list, having seen the percentage of stock on loan increase by 200% to 10% of the market cap. This follows a surge in demand to borrow in October, ahead of the share price falling close to annual lows. Institutional investors who lend are also bearish towards this stock with holdings at annual lows of 12% of the market cap’.

Postnl NV ranks in second place in the Netherlands but also featured amongst the top 10 stocks in the Stoxx 600 which saw the largest increase in short interest. That said, the percentage of stock on loan is modest at 3% of the market cap. This stock is subject to negative sentiment as the share price tracks at annual lows and holdings of institutional ownership funds who lend also stands at annual lows of 23% of the total market cap’.