Despite ticking offs from the archbishops of Canterbury and York, short-sellers still gave housebuilders “a good kicking” last week, in the words of one analyst (see graph).
About 17% of Taylor Wimpey shares were out on loan at the end of last week and Robin Hardy, an analyst at KBC Peel Hunt, saw signs of massive short-selling.
Taylor Wimpey’s shares fell 22% over the week to 35p. Along with its peers, it was particularly hammered on Monday as banks began dropping like flies and rumours spread that the US government’s $700bn bail-out was in trouble.
The water was muddied by the activity of investor Toscafund. As Building went to press it wasn’t clear how much Taylor Wimpey stock it had dumped after the collapse of Washington Mutual. Tosca was the second largest investor in the bank and reportedly lost $525m (£292m) so could certainly have done with the cash.
It also owns nearly a third of Redrow, but the housebuilder’s shares have ridden out the week better than others. Was it down to rumours the 27% stake had come into play? Hardy said: “In this kind of jittery market, you could almost make up what you like and someone would believe it.”