MML Short position

Latest MML short position from ASIC site as at 3/12, currently 10%. Reporting is delayed by about 6 days.

We can see that whilst the sp has been rising from its low around 50c in early November, the short position has counter intuitively moved up by 5.5 million shares (2.68%) to a high of 10%. So it can be assumed that almost all of these most recent shorts are now under water and will have to close if the sp continues to make progress.

Factors: These most recent shorts were likely taken out on the basis that the sp weakness would continue, the gold price would fall further and institutions would sell on announcement of MML's removal from the ASX200. In fact the opposite has happened:

Institutions have been buying on the back of the presentations in Sydney and Melbourne in early November, and the analysts site visit to Medusa's Co-O mine and mill on Mindanao in mid November. Any fund selling as a result of exclusion from ASX200 has been more than made up for by buying. Medusa of course remains in the ASX300.

The gold price has been volatile, recently testing the low of approx $1140 from early November but not going lower and has mainly held around the $1200 level. Some gold commentators are now saying the low for gold is now in and others are saying they need to see $1220 broken for them to have confidence. Predictions of $1000 and $900 gold have not happened. Demand for physical has remained very strong such that premiums in Asia for large size have been said recently by Rob Kirby to be +50% over spot, or in some cases much more.

Hedge Funds will have shorts outstanding from much higher prices but will be losing some profits on these, so will also need to close if the sp rise continues and particularly with low liquidity coming up because of Xmas/New Year.

Wed 3/12/2014 .......20.789 million............10.0%
Wed 26/11 .............18.039 million............ 8.69%
Wed 19/11 .............19.522 million ............9.39%
Wed 12/11 .............16.342 million ............7.86%
Wed 5/11 ...............15.235 million ............7.32%