From the Securities Lending Trading Desk

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This week, shares of Angie’s List Inc. (ANGI) trended higher following the announcement of plans to merge with IAC’s (IAC) HomeAdvisor. We have seen strong lending demand for Property developer Fullshare Holdings Ltd. as it rallied after shares resumed trading. In Europe, the Brexit is looming over Intu and demand for securities lending has increased. 

Below please find May 9’s edition of From the Trading Desk, which provides timely commentary about top security earners, revenue drivers and other factors influencing the securities lending market from the BBH Securities Lending Trading Team.


This week, shares of Angie’s List Inc. (ANGI) trended higher following the announcement of plans to merge with IAC’s (IAC) HomeAdvisor. According to reports, the two companies “together generated roughly $17 billion in transaction value over the past year for over 200,000 paying service providers.” ANGI shareholders have the option to receive one Class A share of ANGI Homeservices Inc. or $8.50 per share in cash for each Angie’s List share they own (closing at $9.51 on 5/2). The terms are prorated and the total amount of cash available in the transaction is capped, so any cash elections beyond $130 million will be prorated with ANGI Homeservices shares.

As the stock price trends lower, fee levels are moving higher, making loans of J. C. Penney Company, Inc. (JCP) more expensive. JCP fell to a 52-week low of $5.35 per share despite their success with the “Store-within-a-store” concept, placing Sephora inside J.C. Penney shops in operation. The continued bearish sentiment on the retail sector, and JCP specifically, compounded with downbeat monthly sales reports and analyst downgrades resulted in more investors shorting JCP. The sector has been a long term focus of bears, and JCP’s stock price has been volatile as far back as 2012. Many analysts believe JCP to be more vulnerable than their peers such as Macy’s (M), Kohl’s (KSS), and Nordstrom (JWN) despite the company’s efforts to rebrand and their recent return to profitability.

Asia Pacific 

Property developer Fullshare Holdings Ltd. rallied in Hong Kong after shares resumed trading, following a short suspension. Short seller Glaucus Research targeted the developer in a report on 25 April sparking a 12% selloff in the company’s shares. Fullshare Holdings Ltd dismissed Glaucus’s allegations as groundless and announced that they had secured financing from a state-owned Chinese bank. We have seen strong lending demand for Fullshare Holdings Ltd.

Noble Group Ltd shares fell in Singapore trading as concerns persisted that the management team will be unable to deliver on restructuring plans. Shares in the commodity trader have more than halved since their peak in February and are falling back toward towards lows not seen since last year. Noble Group Inc has been trying to recover from a punishing few years marked by losses, credit-rating downgrades and asset sales. The company said earlier this year that it’s in discussions with a potential strategic investor and now has plans to consolidate its shares. We have seen strong long term lending demand for Noble Group Ltd.


European equity volatility has eased, leaving some short sellers on the sidelines. Following the first round of French presidential election, European volatility gauges dropped as stocks rallied. The Euro STOXX 50 Volatility Index (VSTOXX) fell from a 9 month high of 25.6 to the 15-16 level, as bears pared short positions and contributed to a shrinking pool of hard to borrow stocks. Many funds remain bullish under the current market conditions, but short interest is sure to rebound once volatility and market turbulence returns.

The Brexit is looming over Intu and demand for securities lending has increased. Shopping center investor and operator Intu Properties announced a trading update ahead of its AGM which was in line with their assumptions. However, they anticipate the environment for business in the current year to be challenging with considerable uncertainty regarding the UK’s exit from the EU.