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Thanks Steven I was trying to think it through initially from the reverse position. An RNS lands increasing the % voting rights but no shares are actually bought as a result it totally confised me until I picked apart the RNS but it makes total sense now. Then I saw the MS disposal and twigged the reverse must apply, the swap disapears as if by magic and with it the voting rights.
Sorry I didnt actually answer your Question : what I'm trying to understand is have 9% of shares in HMSO been sold or have 5% of shares been sold. The synthetic part just kind of disappears, the trade is ripped up (so to speak). It was only reported because it gave MS voting rights. But behind that equity swap is a whole load of other things hedging it. Repos' stock loans, `CFD's Options blah blah blah... which just gets diluted into the financial markets on a daily basis. Thats the way I read it.
A bit of light reading on Equity Swaps :-) Part 2 give you an example. https://corporatefinanceinstitute.com/resources/knowledge/finance/equity-swap-contract/. or here https://finpricing.com/lib/EqSwap.html. The RNS is about holdings/ Voting rights, so as you said MS would have held both physical stock and have synthetic exposure via the EqSwap. Now MS has ZERO. Blackrock on the other hand has 7%+ voting rights some via physical stock some via synthetic products. So someone will have to delta hedge that exposure. There are loads of derivatives that give you exposure to a stock but not the voting rights hence they dont get reported so you only see the RNS when the total voting rights hits certain levels.
I'm not trying to get at anything what I'm trying to undestand is how the equity swap works and how shares fall back to the market so I can understand future RNS's
I agree MS are out 100%, what I'm trying to understand is have 9% of shares in HMSO been sold or have 5% of shares been sold.
MS's holding was approx 5% physical I think and the rest were borrowed in a swap. So if I have understood swaps correctly the original institution now has the other 4% back (whoever that may be,,, but it's not MS)
You are just over complicating it ximtwo, whatever you're trying to get at doesn't really matter. The whole point is that Morgan Stanley are out and have no controlling interest in this share anymore. That means no more needle moving actions being made to manipulate the share price down.
Most definately confused so would appreciate someone correcting my understanding please, If I go back to the 12th April inthe RNS and I've copied correctly MS had 5.789431 % shares and an extra 3.196755 % held virtually by means of equity swap,,, so as I understand it 5.7% in total have been physically sold to the market and passed on to others 3.19% they have cancelled the equity swap, they never owned the shares they only ever borrowed the controlling 'interest' in these shares in terms of a swap for a fixed or variable or other equity swap (I think it was cash according to the RNS).
So MS don't have a controlling interest in any HMSO shares BUT the orignal investment institution now had control of the 3.19% of shares back as the equity swaps were cancelled.
Am I correct in my understanding of the swap in this instance?
Jabar just to put a little more context on what Daytrader17 is saying.
In recent weeks the share price got to 42p and 43p and MS started selling and imho (and many others opinion) they have been day trading and manipulating the share price for their own gain thereafter. Plenty RNS's above to show that.
Then on the run up to retail reopening on 12th April, hopefully permanently and irreversibly and with potential for revenues, profits and improved rents paid MS then sold down most of their holding and depressed the share price. The Times then at the weekend published an article on HMSO being in talks with Brookfield to sell 7 Retail Parks for £350 Million. Another positive article that would help transform the balance sheet. MS sold the remainder on Monday, hence todays RNS.
Yesterday though British Land expressed a desire that it wants to increase its exposure to retail parks (at a time we have 7 to sell)
Todays RNS shows that as of Monday they had nothing left and therefore the headwind or brakes we have previously seen at key times have been removed. "Seller gone as they say" and hopefully we can now make the lost ground on the sp that we should have got without the seller.
The one thing I will say is credit to them for they have announced that they now have a zero holding which they didn't need to do.
Am I right in thinking those last two RNS's were the equity swap removal so in theory borrowed shares from another institution whereas the RNS a few days back was actual shares.
So in terms of the recent RNS the shares have not been sold they have just cancelled the option on the equity swap so MS don't hold the interest in the shares anymore and now it will be up the original physical holder to either sell or hold as they wish or swap them out again?
They already dumped their shares days ago hence the fall in sp and the sp has bounced back because there were buyers willing and able to scoop them up. Now we don't have an institution day trading at the expense of retail investors. It adds a little more stability to the share price.
I'm just learning to read these RNS,, but I don't think its related to a short I believe they cancelled the equity swaps they had running out to 2024. I think earlier they sold there physical share holding and this is the removal of the rest of there 'synthetic' holding by way of swap. I'm a novice so thats my understaning. They have left the room, but like others say it happens all the time it seems.