At the start of each week I like to take a look at which ASX shares are attracting the most unwanted interest from short sellers.
When an investor decides to "short" a company's shares, it means they are borrowing shares to sell on market with the aim of buying them back at a lower price further down the line.
According to data by ASIC, these are the 10 most shorted shares on the Australian share market currently:
- Orocobre Limited (ASX: ORE) continues to be the most shorted share on the ASX with short interest of 20%. A couple of unexpected production downgrades from the lithium miner is largely been behind the negative sentiment.
- Syrah Resources Ltd (ASX: SYR) has 19.3% of its shares held short. Despite this high level of short interest, the graphite miner's shares rallied over 18% last week thanks to news that production at its Balama project is on target to commence in August.
- Western Areas Ltd (ASX: WSA) has seen a sudden uptick in short interest, rising to 16.3%. Global nickel prices fell sharply last week after the Indonesian government eased its nickel ore export ban further.
- Myer Holdings Ltd (ASX: MYR) has 16.2% of its shares in the hands of short sellers. This is also up sharply from a week earlier. Weak retail conditions and the growing e-commerce threat appear to be behind the negative sentiment.
- Independence Group NL (ASX: IGO) has seen short interest slide to 15%. A cut to its Nova operation's full-year production guidance due to underground development delays has weighed heavily on the gold miner this year.
- iSentia Group Ltd (ASX: ISD) has short interest of 13.4%, up again week-on-week. It appears as though short sellers expect more bad news out of the media intelligence company's content marketing segment.
- Retail Food Group Limited (ASX: RFG) has 13% of its shares held short. A disappointing trading update is likely to have attracted short sellers to the food and beverage company.
- JB Hi-Fi Limited (ASX: JBH) has jumped back into the top 10 with short interest of 12.4%. Like many retailers, the imminent arrival of a certain US e-commerce giant has investors expecting the worst for JB Hi-FI.
- Metcash Limited (ASX: MTS) has 12.4% of its shares held short. The wholesaler and distributor's shares climbed an impressive 17% in June, thanks to better-than-expected full-year results.
- Mayne Pharma Group Ltd (ASX: MYX) has 12.1% of its shares in the hands of short sellers. Investors appear to be concerned that the pharmaceutical company may have overpaid for its massive acquisition last year following President Trump's plan to cut the prices of generic drugs.
