Increased Short Interest in UBS

Europe’s biggest casualty of the subprime crisis, UBS (UBS), has announced a further massive loss and its second capital increase in two months, says the FT. The bank's chairman Marcel Ospel today said that he would not seek re-election amid the crisis.

Whether or not the FT are correct in saying that this bank is the biggest casualty is arguable (the share holders of Northern Rock might have something to say about that), but nonetheless, 4% of UBS' Market Cap is on loan (%MCOL), up from 1.5% in early January (please click to enlarge graph).

This may seem like small fry, but this is 4% of an approximate $65bn. Shares have tumbled from 53CHF to 30CHF since December 27th. Utilisation is 13%, so there is still a lot left to borrow. For those investors wishing to buy back shares there are 2.77 Days to Cover (also known as "short interest ratio").

Some of this trading could be dividend related (next dividend is April 25th), but our data reveals that this would be pointless for many investors who receive 100% of the dividend anyway, further reflected in the low Utilisation figure. These holders of the stock have continued to lend the stock out, presumably to short investors.

Disclosure: none

Comments

[helplessobserver]

With UBS real trouble lurkes here. A run on this bank may be the next shoe to drop that sends the DOW down below 10,000.

[venividivici]

Only an idiot would give UBS anything other than monopoly money to play with. Clearly there are a huge number of idiots out there.