The interest rate decisions of many federal banks are pushing the stock exchanges in Europe into the red. The trend could continue and a hedge fund is betting billions on the development. So far, Bridgewater has “shorted” shares in 21 European companies.
Bridgewater is apparently pessimistic about the economic prospects for Europe. The hedge fund has launched bets on falling European stocks with a volume of at least $6.7 billion, said data provider Breakout Point. No other asset manager speculates nearly as aggressively in this direction.
At the beginning of 2018 and 2020, Bridgewater also bet heavily on a bear market. From the asset manager’s mandatory publications, it can be concluded that he has currently “shorted” shares in 21 European companies, Breakout Point said.
In so-called short selling, investors borrow shares in order to sell them immediately. They are betting that they can stock up on the papers more cheaply by the return date. They pocket the difference as profit. According to Breakout Point, insurers Allianz and Axa are among those on the list of stocks Bridgewater expects to fall. In addition, there would be banks like Santander, BBVA, ING or Intesa Sanpaolo.
The largest volume would be bets on a setback for the shares of the chip supplier ASML, the energy company TotalEnergies and the pharmaceutical company Sanofy. According to European regulations, investors must declare if they make short sales of more than 0.5 percent of a company’s total capital. The actual size of Bridgewater’s bets could be even larger. However, it remained unclear to what extent the short sales are hedging transactions for other investments. The hedge fund has not yet been reached for comment.
