Free Trial

MNI BRIEF: Fiscal Space Key To Short Sellers Early Covid Gains

(MNI) Frankfurt

Short sellers anticipated the importance governmental fiscal space would play in supporting vulnerable firms at the outbreak of the Covid-19 pandemic, a discussion paper published by Germany's Bundesbank found, leading to a clear rise in short selling positions in companies with low liquidity that were also headquartered in countries with poor credit ratings.

The shift in strategy ahead of February 2020's market collapse resulted in abnormally high returns, while in countries with a good credit rating, no such change in short sellers' strategy was observed, the paper concluded.

MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com
True
MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com
True

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.