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The Short Report – 16 Mar 2023

Weekly Reports | Mar 16 2023

This story features NOVONIX LIMITED, and other companies. For more info SHARE ANALYSIS: NVX

See Guide further below (for readers with full access).


By Greg Peel

Week Ending March 9, 2023.

Last week the ASX200 continued to graft back from the February lows triggered by “hot” US inflation data and an ever more hawkish Fed. The RBA had also seemed more hawkish than hoped at its February meeting, but the March meeting rather reversed that sentiment.

The week ended ahead of the collapse of Silicon Valley Bank and the subsequent global equity sell-off, further exacerbated by last night’s Credit Suisse dilemma.

As we can see from the table below, there was very little movement in short positions, and none of one percentage point or more.

Thus for lack of any further commentary, this week’s Movers & Shakers highlights two stocks: Novonix ((NVX)) and 29Metals ((29M)).

Weekly short positions as a percentage of market cap:

FLT     11.8
BET     11.2
SYA    10.4

No changes



No changes



No changes



In: JBH           Out: BRG, CCX



In: CCX, BRG                        Out: JBH, NVX



In: NVX                      Out: PNI

Movers & Shakers

Novonix ((NVX)) has over time been roped in alongside lithium miners as hot property in the surging EV, and all else electric, space. Novonix does not mine lithium. It produces cathodes and anodes from synthetic graphite for use in lithium-ion batteries. So it is at least a “battery” stock.

In June 2021, Novonix was trading at $2.22 and in October 2022 it was trading at $2.68. Nothing remarkable there, except for a trip to $11.95 in November 2021. That rather sums up the battery hysteria-followed-by-reality-check story of the past couple of years.

In the February result season just past, Novonix reported it still wasn’t making any money, which was not a good look. The company is struggling for scale, but according to Elon Musk, the story is the same in the US. At Tesla’s recent investor day, Musk announced:

“We are obviously building a cathode processing facility just adjacent to this building…for cathode refining. We’d really prefer it if others did that. We’re doing it because we have to, not because we want to. There just really isn’t any large-scale cathode production in the United States and it needed to be done.”

Tesla commencing its own cathode production is not good news for Novonix either. And that’s before the collapse of Silicon Valley Bank sparked a rapid sell-off of all things “innovative”, including anything to do with an electric world. Novonix shares are currently trading at $1.37.

The stock is 5.5% shorted, down from 6.0% the week before. Only one broker in the FNArena database covers Novonix, and Morgans last week downgraded to Hold from Buy with a target of $1.44.

Sitting at 5.0% shorted, 29Metals is no stranger to the 5%-plus shorted table, having been in and out at the low end over time. Last week the miner announced that due to unprecedented wet weather in northern Queensland, operations at its Capricorn copper project would need to be suspended for three to four weeks.

Yesterday, the company announced that due to water inundation, that suspension would now be for three to four months. Having hit a high of $3.07 in December 2021, 29Metals is currently trading at $1.17.

The FNArena database shows two Hold and three Sell or equivalent ratings with a consensus target of $1.39. Two brokers have not updated post February.

ASX20 Short Positions (%)

Code Last Week Week Before Code Last Week Week Before
ALL 0.3 0.3 NCM 0.7 0.6
ANZ 0.5 0.5 RIO 1.2 1.1
BHP 0.3 0.2 S32 0.4 0.4
CBA 1.2 1.2 STO 0.7 0.5
COL 0.5 0.7 TCL 0.7 0.8
CSL 0.3 0.3 TLS 0.2 0.2
FMG 1.3 1.3 WBC 1.4 1.5
GMG 0.7 0.7 WDS 1.2 1.3
MQG 0.7 0.6 WES 0.7 0.6
NAB 0.5 0.6 WOW 0.5 0.4

To see the full Short Report, please go to this link


The Short Report draws upon data provided by the Australian Securities & Investment Commission (ASIC) to highlight significant weekly moves in short positions registered on stocks listed on the Australian Securities Exchange (ASX). Short positions in exchange-traded funds (ETF) and non-ordinary shares are not included. Short positions below 5% are not included in the table below but may be noted in the accompanying text if deemed significant.

Please take note of the Important Information provided at the end of this report. Percentage amounts in this report refer to percentage of ordinary shares on issue.

Stock codes highlighted in green have seen their short positions reduce in the week by an amount sufficient to move them into a lower percentage bracket. Stocks highlighted in red have seen their short positions increase in the week by an amount sufficient to move them into a higher percentage bracket. Moves in excess of one percentage point or more are discussed in the Movers & Shakers report below.


The above information is sourced from daily reports published by the Australian Investment & Securities Commission (ASIC) and is provided by FNArena unqualified as a service to subscribers. FNArena would like to make it very clear that immediate assumptions cannot be drawn from the numbers alone.

It is wrong to assume that short percentages published by ASIC simply imply negative market positions held by fund managers or others looking to profit from a fall in respective share prices. While all or part of certain short percentages may indeed imply such, there are also a myriad of other reasons why a short position might be held which does not render that position “naked” given offsetting positions held elsewhere. Whatever balance of percentages truly is a “short” position would suggest there are negative views on a stock held by some in the market and also would suggest that were the news flow on that stock to turn suddenly positive, “short covering” may spark a short, sharp rally in that share price. However short positions held as an offset against another position may prove merely benign.

Often large short positions can be attributable to a listed hybrid security on the same stock where traders look to “strip out” the option value of the hybrid with offsetting listed option and stock positions. Short positions may form part of a short stock portfolio offsetting a long share price index (SPI) futures portfolio – a popular trade which seeks to exploit windows of opportunity when the SPI price trades at an overextended discount to fair value. Short positions may be held as a hedge by a broking house providing dividend reinvestment plan (DRP) underwriting services or other similar services. Short positions will occasionally need to be adopted by market makers in listed equity exchange traded fund products (EFT). All of the above are just some of the reasons why a short position may be held in a stock but can be considered benign in share price direction terms due to offsets.

Market makers in stock and stock index options will also hedge their portfolios using short positions where necessary. These delta hedges often form the other side of a client's long stock-long put option protection trade, or perhaps long stock-short call option (“buy-write”) position. In a clear example of how published short percentages can be misleading, an options market maker may hold a short position below the implied delta hedge level and that actually implies a “long” position in that stock.

Another popular trading strategy is that of “pairs trading” in which one stock is held short against a long position in another stock. Such positions look to exploit perceived imbalances in the valuations of two stocks and imply a “net neutral” market position.

Aside from all the above reasons as to why it would be a potential misconception to draw simply conclusions on short percentages, there are even wider issues to consider. ASIC itself will admit that short position data is not an exact science given the onus on market participants to declare to their broker when positions truly are “short”. Without any suggestion of deceit, there are always participants who are ignorant of the regulations. Discrepancies can also arise when short positions are held by a large investment banking operation offering multiple stock market services as well as proprietary trading activities. Such activity can introduce the possibility of either non-counting or double-counting when custodians are involved and beneficial ownership issues become unclear.

Finally, a simple fact is that the Australian Securities Exchange also keeps its own register of short positions. The figures provided by ASIC and by the ASX at any point do not necessarily correlate.

FNArena has offered this qualified explanation of the vagaries of short stock positions as a warning to subscribers not to jump to any conclusions or to make investment decisions based solely on these unqualified numbers. FNArena strongly suggests investors seek advice from their stock broker or financial adviser before acting upon any of the information provided herein.

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