Komfie Manalo, Opalesque Asia: Hedge funds are shorting the biggest banks in Australia, signaling there
is trouble brewing in one of the most profitable banking sectors in the
world, reported The Australian.
Data has shown that short bets against the four largest Australian
banks, including Commonwealth Bank, ANZ, Westpac and National Australia
Bank, have jumped 50% this year, totaling $9bn on fears that rising bad
debts, declining earnings and concern of a falling property market which
have triggered worry amongst investors.
The number of shorts against Australia’s largest lenders is the highest
on record to day since regulators started to compile data six years ago.
Ironically, Australian banks have traditionally been favorite amongst
investors because of their huge profitability.
Jonathan Tepper, head of a U.S.-based hedge fund consultancy firm
Variant Perception, was quoted as saying, "We witnessed a mania in all
its crazy excess." He has recommended the shorting of Australian banks
in anticipation of a major property meltdown in the region.
Tepper has partnered with Australian asset manager John Hempton early
this year to conduct covert investigation of the Australian property
market. The duo drove around Sydney, from the glitzy beachside suburbs
to shabby...................... To view our full article Click here
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