UMS, Keppel DC Reit short interest levels rising
Semiconductor-testing solutions provider AEM has been topping Singapore’s short interest chart for months, with 7.02% of its outstanding shares having been borrowed
THE short interest levels of UMS Holdings and Keppel DC Reit have been rising, and have sent both these counters into the list of the five most shorted counters in Singapore.
Semiconductor equipment manufacturer UMS had the fourth-highest short interest – defined as the percentage of outstanding shares on loan – at 2.88 per cent as at Jun 28, S&P Global Market Intelligence data showed.
Keppel DC Reit, a Reit focused on data centres, had the fifth-highest level, at 2.37 per cent.
Semiconductor-testing solutions provider AEM has been topping Singapore’s short interest chart for months, with 7.02 per cent of its outstanding shares being borrowed.
Flag carrier Singapore Airlines and provider of engineering solutions to the offshore, marine and energy industries, Seatrium , were behind as the second- and third-most shorted stocks in Singapore respectively.
The short interest across the Straits Times Index was 0.56 per cent.
UMS has been on the top five list before: the last time its short interest levels peaked, at 3.1 per cent, was on May 24, 2023.
The counter’s short interest spiked to 1.55 per cent on May 15, 2024, from 0.62 per cent the day before.
Its short interest levels have stayed elevated since, keeping the counter in the top five shorted stocks list since the week to Jun 7.
Matt Chessum, director of securities finance at S&P Global Market Intelligence, said of UMS: “Short interest has increased… following a recent decline in Q1 revenue and a weaker-than-expected Q2 outlook.
“As the artificial intelligence (AI) frenzy continues, the semiconductor sector is becoming increasingly competitive, as investors continue to scrutinise semiconductor companies to find those that will benefit the most from increased AI-linked demand.”
The counter endured a sell-down of 15.9 per cent on May 13, after having reported a 44 per cent plunge in its net profit for the first quarter.
DBS Group Research downgraded the stock to “hold” and slashed its target price to S$1 from S$1.84 in a report released shortly after.
Its analysts said that sluggish demand from UMS’ key customer was expected to continue to affect the group in the short term.
The counter was 0.9 per cent or S$0.01 higher at S$1.19 on Wednesday, but down 10.5 per cent in the year to date.
Meanwhile, Keppel DC Reit’s short interest has been going up since late November; the counter joined the list of Singapore’s top five shorted counters two weeks ago.
Gabriel Yap, a veteran investor in Reits, described the rising short interest in Keppel DC Reit as “not surprising”, given the turn of events since April.
The manager of the Reit had announced that month that the Reit was divesting its freehold 100-per-cent interest in its Sydney data centre, Intellicentre Campus, for A$174 million (S$152.1 million).
About A$90 million of the proceeds from that divestment were then reinvested into an Australian data centre note issued by Macquarie Data Centres Group. That was to enable the Reit to retain its exposure to the Australia data centre market, the Reit manager had then said.
The deals were completed a week ago.
Saying that the Reit’s investment in the Macquarie note “does not make sense”, Yap added: “You sell the Intellicentre to raise liquidity, then lock yourself up for a longer, illiquid 8.5 years’ structured note, while earning only a meagre higher yield offset.”
