Short-sellers bet £100m that Centrica shares have further to fall, after it only narrowly avoided getting booted out of Footsie
Hedge funds are betting a record £100million that shares in British Gas owner Centrica will continue to cool.
A disastrous year has seen chief executive Iain Conn step down after failing to stop customers switching suppliers, causing the share price to lose half its value.
It closed on Friday at 76p. Centrica narrowly avoided relegation from the FTSE 100 earlier this month but looks to be at risk at the next reshuffle in three months’ time.
Holding on: Thousands of private investors hold Centrica shares bought when British Gas was privatised in 1986
If it does drop out, investors betting against the shares will have cashed in.
Short positions – a way of making money if a share price falls rather than rises – in Centrica are at a record high, data from the Financial Conduct Authority reveals.
More than 2.2 per cent of the shares – worth almost £100million – are now in the hands of two short-sellers, London hedge fund Marshall Wace and investment giant BlackRock.
Marshall Wace, founded by billionaires Paul Marshall and Ian Wace, cranked up its bet, doubling the position in just two months.
Thousands of private investors hold Centrica shares bought when British Gas was privatised in 1986.
British Gas, still Britain’s largest energy supplier with 7.2million customers, faces new competition.
OVO Energy has broken into the ‘Big Six’ following a £500million deal to buy SSE’s retail division.