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London-based hedge fund Qube Research & Technologies has denied taking a £670mn bet against HSBC shares, after declaring the position in a filing with the Financial Conduct Authority earlier this week.
The position, which would equate to 0.57 per cent of HSBC’s market capitalisation, one of the biggest short positions on a big four UK bank on record, was taken out on Tuesday, according to data reported to the FCA which was published on Wednesday.
But in a statement to the Financial Times on Friday afternoon, Qube said: “The FCA filing was made erroneously due to a technical issue and is currently being corrected with the FCA. Please note that QRT do not have a net short position in HSBC.”*
Qube is a quantitative multi-strategy hedge fund firm that takes bets across a range of markets and strategies.
HSBC declined to comment. The bank’s shares have gained about 18 per cent so far this year. The FCA declined to comment.
The last time a hedge fund took a short position above the disclosure threshold against HSBC was when Ray Dalio’s Bridgewater shorted the stock in early 2018. Bridgewater’s short position was smaller in percentage terms but a similar size in sterling terms.
Ivan Ćosović, founder of data group Breakout Point, said it would be “unexpected” for Qube to make “a disclosure of this size”.
HSBC has enjoyed an increase in revenue largely driven by the sharp increases in interest rates that began almost two years ago. With higher rates, the bank has made more money by lending out customer deposits.
But there are still challenges, given its exposure to the Chinese economy, which has failed to rebound strongly from stringent Covid-19 lockdowns.
HSBC’s largest shareholder, Chinese insurer Ping An, previously pushed the bank to split and list its Asia business, arguing that it had become too difficult to manage rising tensions between the west and China.
Ping An’s proposal was rejected by 80 per cent of shareholders in May at the bank’s annual meeting.
Qube was spun out of Credit Suisse’s asset management arm in 2018 and is managed by chief executive Pierre-Yves Morlat and chief investment officer Laurent Laizet. According to company filings, it paid its 343 employees £272mn in wages and related benefits last year. That was up from 229 staff in 2021, with staff costs at £105mn.
*This story has been amended after publication to reflect Qube’s denial that it had taken out the position
