Iron Ore Price, page-2689

A growing number of investors are betting that BHP Billiton shares will fall further, with short positions in the resources giant rising to their highest levels in almost four years.

While the percentage of BHP shares sold short remains much lower than in highly geared rivals like Santos Limited and Fortescue Metals Group, it has risen five-fold since March with the bulk of that rise coming since the start of the new financial year.

BHP shares have already fallen 27 per cent since March and short sellers are effectively betting that the share price will continue falling and allow them to complete their trades at a lower share price in the future.

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While prices for all of BHP's products have fallen in 2015, Shaw and Partners analyst Peter O'Connor said continued weakness in oil and gas prices was likely to be the biggest factor behind the surge in short positions.

"Oil and gas prices have continued to be weak, particularly since July and that is when the shorting picked up. That is reflecting on a large part of the company which is generating zero to negative returns on a significant amount of capital invested," he said.

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