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The Morgan Stanley RNS, reported on the 25th April, showed in the Off Book volumes on the 22nd April. On the day 194 Million Off Book volume went through, with a further 25.95 shares traded On Exchange.
https://www.lse.co.uk/rns/BT.A/holdings-in-company-oxsnr5qe18ti6g8.html
https://docs.google.com/spreadsheets/d/e/2PACX-1vS4gJMsDAQq9sJ_zHqi_JnoVTryAdb4X64c7Clw12E2sGT3N6dTJfB60O8bc5Ns4burXvSSCVFrLvWC/pubchart?oid=457705223&format=interactive
Hi Fleccy,
I'm trying to understand the RNS you've referenced.
Its not clear to me if it was a buy, sell or something else.
---
the reason for notification in section 2 is given as "Basket Weighting Change", whatever that means. I've googled it and just get references inflation indicators.
But it's section 7 that has me really puzzled.
"% of voting rights attached to shares" has moved from 0.06 to 0.00 , so you might first think its a sell
however,
"% of voting rights through financial instruments" has moved from 6.6 to 7.0,
and,
"Total number of voting rights held in issuer"... after the transaction nearly 700M
So is it a buy... or has the holding be migrated from one kind of instrument to another ?
Also, section 8B2 sets out a schedule of option execution dates into 2026....
So, my feeling is that this is Morgan Stanley doing some housekeeping.
What do you think?
thanks
M
I must admit it confused me too.
It looks as though they reduced their 8A Share Holding position to 0, but added a further 0.315403% to their 8B1/2 Financial Instrument's position.
Dumped all their shares. Not a good sign
What do you base that on?
The majority of the holding looks like call options. Which I guess means that the downside is limited to the option price.
They also appear to have a small amount out on loan, to shorters I assume.
IDoMyBest - was literally just typing out I think they're loans to short sellers but... in a longer way haha - I'll save the waffle!
All a bit baffling, looks like MS mostly using compound options, so derivatives of derivatives. Can't see this moving the share price much, poor results/CMA outcome another matter though. Doesn't seem to indicate whether puts/calls, an options trader might know.
MS have been overweight, wouldn't stop them from doing a volte face for profit, their reputation already goes before them.
Latest RNS seems to confirm the loans to other interested parties (see Equity Swaps in section 8B2) which can include parties with short positions.
I'm seeing more and more increasing their holdings yet thsi crappy London stock echange . is determined to undermine BT shares. I'm sure thery have a n EX Ofcom employee sitting a cupboard somehere pulling levers.
The compound options are around 7% of voting rights, whereas the swaps are a fraction of a %, so small beer. It looks like jockeying for profitable market positions as the price changes, rather than taking a big risk with shorts.
Happy to be proved wrong.
Looks as though MS bought some stock to their 8A position, 0.001375% (136,841 shares).
https://www.lse.co.uk/rns/BT.A/holdings-in-company-9ys1uequwl4e0zy.html
Good point Fleccy and scrolling down further I spot it says: "Of the total voting rights attached to shares in Section 8A, 136,790 (0.001375%) of these are the result of stock borrowing agreements."
I didn't read the full RNS, just looked at the percentage and calculated the number of shares based on total voting rights of 9,952,100,727.
Fleccy - Well you got pretty close there tbf, rounding would have been where the count drifted out slightly...
Of their total positions are we in agreement MS are most likely loaning out 136,790 of them to shorters? (It looks that way to me).
I can't claim to understand the FCA regulations but MS are reporting these as 8.A voting rights, which would indicate they're holding the stock. If they'd loaned out the stock for shorting, then I assume they wouldn't hold any voting rights since the shares would have been sold as part of a short position.
https://www.handbook.fca.org.uk/handbook/DTR/5/?view=chapter
I see.. It's the 8B2 section, where it lists some of them as 'Equity Swap' rows, together with the statement in point 11 right near the bottom of the RNS notice.
".. but MS are reporting these as 8.A voting rights, which would indicate they're holding the stock "
Fleccy
I think the issue is more the way the form is set out and the wording used
" % of voting rights attached to shares " -this is actually where the shares are owned ... you can only have a voting right if it is actually ATTACHED to actual shares ...
"% of voting rights through financial instruments " - very little detail there, and maybe there should be an * attached with small print to explain .... that any REAL voting rights only become ATTACHED and therefore active at a future point where the Derivative is exercised and turned into REAL shares ... as we know Derivatives are about a FUTURE Option to buy and sell shares .. so the voting right does not become ATTACHED until that point where you exercise that Option right to...buy ...or not
so..at this point MS dont own any shares within the future Derivative Options that they have placed .... and whether they do or not at some Future point depends on the exercising or not of those complex Options ...
So, they have paid a premium to buy calls, which basically means they fancy it rising.
The but is, that they have a max loss of the premium if they let the rights lapse.
It’s still a positive move by them as far as I am concerned.
" they have paid a premium to buy calls "
yes, exactly ....the Call seller gains the Premium if it isnt exercised ....I imagine a Feb 2024 Call at an exercise price of say 150p isnt so expensive right now ... .. sell the share price down now , buy a cheap Call as a consequence and make big with little up front cost if a future Option then goes "in the money"
I wonder if MS are betting here on a Trump victory and a post election market rally
Interesting seeing Kintbury raised its short on 30 Apr in tandem with the MS RNS... Possible Kintbury shorters are borrowing the stock from MS on equity swaps I think...
" Possible Kintbury shorters are borrowing the stock from MS on equity swaps I think..."
MS dont have any shares ... An Equity swap is a Derivative product so doesnt in itself actually involve any shares themselves
I would guess that ...maybe... Kintbury borrowed shares from whoever and sold them independently and.. maybe... MS made their Future Call Option bet based off the Call Price being lower as a result of the lower SP caused by the shorter selling ...
Equity Swaps... the likes of MS often do those directly with Institutional Investors
From the RNS
Right of recall over securities lending agreements 865,000 shares.
In short they have loaned out shares to shorters.
" In short they have loaned out shares to shorters."
IDoMyBest
I read it that MS only have a measly 136,790 shares 0.001375%
As such it is MS that has borrowed 865,062 shares and the owners of those shares have rights to recall them from MS .. I saw it that they cant lend out more shares than they actually have Voter Rights Attached
I cant say but maybe MS borrowed them and sold them to bring down the SP to then buy Options at lower price ??