Market Report: A bad day for Lansdowne Partners

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It was a day to forget for Lansdowne Partners. The hedge fund has short positions in Glencore, Sainsbury’s, and Morrisons, meaning it is betting on their share prices falling. 

So when all three made big gains it spelt bad news. Glencore’s rollercoaster ride continued as it recovered another 11.3p to 91.55p; Sainsbury’s surprised investors by raising profit forecasts and rose 31.7p to 261p, helping rival supermarket group Morrisons move 10p higher, to 166.1p. 

However, Lansdowne will not be too bothered by these dramatic daily swings – ultimately, it has made a killing. Glencore, of whose shares Lansdowne has borrowed 0.9 per cent, crashed almost 30 per cent on Monday as investors panicked: it has lost almost two-thirds of its value in just three months. 

Lansdowne’s 1.9 per cent short on Sainsbury’s has remained steady over the past 15 months, in which time the shares have tumbled 20 per cent.

Lansdowne has upped its short on Sainsbury’s rival Morrisons in recent weeks, borrowing close to 3 per cent of the supermarket group’s shares. Before Wednesday’s rise, it had fallen 18 per cent this year.

Temporary power provider Aggreko, another Lansdowne short, whirred 75p higher to 951p after cash-strapped peer APR Energy, 13.25p better off at 79.25p, received a one-month extension on its banking covenants.

The rise in the copper price which lifted Glencore also lifted Kaz Minerals 11.95p to 84.65p.

Short-sellers will be sorry to see the back of the third quarter, which has been a fruitful one for bear raiders.

It has been the worst period for the FTSE 100 in four years, even after a strong finish that saw the blue-chip index jump 152.37 points or 2.6 per cent to 6,061.61.

Over on AIM, Tungsten Corp dipped 0.25p to 59.5p despite the hedge fund Odey Asset Management snapping up more than 19 per cent of the struggling e-invoicing firm’s stock.

Strat Aero soared 1.63p – 37 per cent – to 6p after buying drone surveillance firm Geocurve, which has recently mapped the Norfolk Broads National Park for the Environment Agency.