By Nell Mackenzie
LONDON (Reuters) – Hedge funds snapped up financial institution shares on the quickest clip in three years whereas taking bets in opposition to renewable electrical energy producers final week, a Goldman Sachs word confirmed, as traders reacted to Donald Trump’s win within the U.S. presidential election.
Monetary shares, akin to banks and buying and selling corporations, have been the most well-liked and most web purchased sector on Goldman Sachs’ prime brokerage buying and selling desk final week, the word from Friday and seen by Reuters on Monday confirmed.
Whereas the word didn’t specify which area’s banks attracted essentially the most consideration, a second word additionally despatched from Goldman Sachs’ prime brokerage the identical day stated U.S. banks would profit.
Monetary shares are anticipated to get a lift from a lighter regulatory contact which many consider will include the brand new Trump time period, the second word stated.
Finance corporations have been additionally seen benefiting from anticipated tax reform, it added.
“There’s scope for U.S. Financials positioning to rise additional,” the second Goldman word stated, including that present hedge fund positioning on this inventory sector remained on the decrease facet, traditionally.
U.S. financial institution shares rose as a lot as 11.1% on Nov. 6, from the day prior to this’s shut after the information of Trump’s election win.
Prime brokerage desks lend to and organize trades for hedge funds.
Lengthy inventory bets, anticipating rising costs, have been led by banks in addition to corporations providing shopper finance, capital markets and monetary providers, the primary word stated.
Bullish bets centered on U.S. shares however included equities in growing markets in Asia. In Europe, hedge funds exited quick positions and added lengthy ones. A brief guess anticipates the worth of an asset value will fall.
Utilities corporations have been web offered for the primary time in 4 weeks, “pushed virtually fully by quick gross sales,” Goldman Sachs’ first word stated.
Unbiased energy and renewable electrical energy producers have been essentially the most offered, with hedge fund bets in opposition to U.S. utilities corporations numbered at two shorts for each lengthy place, the financial institution stated.
(Reporting by Nell Mackenzie; modifying by Dhara Ranasinghe and Andrew Heavens)
