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Once a week I like to look at ASIC's short position report to find out which shares are being targeted by short sellers.
This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn't quite right with a company.
With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:
- Flight Centre Travel Group Ltd (ASX: FLT) continues to be the most shorted ASX share despite a slight easing to 14.5%. Short sellers appear to believe the Omicron variant will weigh heavily on the travel market for some time to come.
- Kogan.com Ltd (ASX: KGN) has seen its short interest rise to 10.9%. A very disappointing performance over the last 12 months and expectations that it will continue in FY 2022 have been weighing on its shares. A underwhelming update from rival Catch today won't have helped matters.
- Zip Co Ltd (ASX: Z1P) has seen its short interest jump to 10.1%. A range of factors including increased competition, rising interest rates, and regulatory scrutiny are weighing on BNPL shares.
- Redbubble Ltd (ASX: RBL) has short interest of 9.7%, which is up week on week. Short sellers don't appear confident that this ecommerce company's performance will improve in 2022.
- Mesoblast limited (ASX: MSB) has short interest of 9.4%, which is up week on week. Short sellers have been increasing their holdings since Novartis terminated an agreement that could have been worth US$1.25 billion.
- BHP Group Ltd (ASX: BHP) has short interest of 8.9%, which is up week on week once again. This is being driven by traders looking to profit from the unwinding of its dual listing, which will be voted on this week. They have shorted BHP's ASX shares and bought the cheaper UK shares that will eventually be repatriated if all goes to plan.
- Webjet Limited (ASX: WEB) has short interest of 8.7%, which is up week on week. Concerns over the Omicron variant are spooking investors and putting pressure on its shares.
- Polynovo Ltd (ASX: PNV) has seen its short interest rise to 7.9%. Short sellers may regret not closing out of this one sooner. This medical device company's shares rocketed higher last week following a trading update.
- Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rise to 7.4%. Given the prospect of interest rates rising quicker than expected, investors may have concerns over the lofty multiples this betting technology company's shares trade on.
- Appen Ltd (ASX: APX) has seen its short interest remain flat at 7.2%. This high level of short interest may be due to concerns about structural changes in the artificial intelligence data services market. This includes big tech companies taking things in-house.
