LTCM offloads Volkswagen shares

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THE US hedge fund, Long-Term Capital Management, has quietly offloaded a long line of preference stock in German car maker Volkswagen. The sales were made to cover a large short position in the company's ordinary shares. The value of VW's preference shares has halved since last week. The sale also hit VW's ordinary shares, which fell DM7.5 to DM116.5, a drop of 6 per cent.

Meanwhile, a new spate of hedge-fund selling sent bond markets falling yesterday. US Treasuries opened sharply lower after a hedge fund - rumoured to be George Soros's Quantum - began liquidating positions. UK investors sold gilts amid rumours that hedge funds were again unwinding positions. The yield on the 10-year UK government bond rose 5 basis points to 5.12 per cent.

News Analysis, page 23