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The Independent- The American hedge fund group Harbinger Capital Partners revealed that it has made a significant bet on HBOS’s price falling, while its UK counterpart GLG admitted it is targeting the rival mortgage bank Bradford & Bingley, as investors were forced yesterday to disclose their short positions to the market for the first time.
The Financial Services Authority shocked the trading community a fortnight ago when it announced that investors would be compelled to disclose short positions of more than 0.25 per cent of share capital in companies carrying out rights issues.
The announcements started on Friday, and continued yesterday with 20 investors, predominantly hedge funds, disclosing short positions in seven companies that are in the process of carrying out rights issues.
Times Online- The hedge fund industry’s lobby group mounted a last-ditch attempt yesterday to persuade the City regulator to delay its controversial rules on short-selling, which are due to come into force tomorrow.
The Alternative Investment Management Association sent a letter to the Financial Services Authority (FSA) asking for more time for its members to prepare for the changes.
The association’s call was backed by Andrew Shrimpton, the former head of hedge fund regulation at the FSA. He said that the regulator should wait “until next Wednesday, at the earliest” to give the funds sufficient breathing space. “The FSA is skating on thin ice, using emergency powers to bring in these requirements, and is vulnerable to a legal challenge,” Mr Shrimpton said. “It should try to generate some goodwill with the industry by showing it can listen and back down in light of what it hears.”
Times Online- The Financial Services Authority took the unprecedented step of pressuring Britain’s five biggest banks into supporting the revised rescue capital-raising at Bradford & Bingley last week, The Times has learnt. HSBC, Royal Bank of Scotland, Barclays, Lloyds TSB and HBOS are understood to have each agreed to sub-underwrite £20 million-worth of the reworked £258 million rights issue.
The banks agreed to step in when Citigroup and UBS, the lead underwriters, could find no one to whom they could lay off some of the risk. Underwriters typically pass on some of the risk to institutions known as sub-underwriters. The FSA, worried that too much Bradford & Bingley stock would be left with UBS and Citigroup, which are already under pressure, decided in the middle of last week to ask the big five to take some of the risk.
