Unisuper cuts short selling loans amidst market panic

One of Australia's largest superannuation funds has taken a precautionary approach to market volatility caused by the Covid-19 outbreak, suspending its stock lending program effective immediately.

Unisuper, a $85 billion superannuation fund for the higher education and research sector, has instructed its custodian BNP Paribas Securities Services to recall all shares currently out on loan, without exception.

"In a normally functioning market we're comfortable lending our shares as we genuinely believe that it adds to market efficiency," says Unisuper's chief investment officer John Pearce.

"The ability to short-sell adds to liquidity and price discovery in an orderly market. However, we are now in a market gripped by panic and we believe that restricting the ability to short-sell is in the best interest of promoting a more orderly market."

Pearce added, "We are only one fund and the efficacy of our actions will depend on how many other funds follow a similar path. Of course, we are not privy to the thinking of other funds who lend their stock."

Updated at 2:17pm AEDT on 16 March 2020. 


Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Crypto staking: a new way to earn passive income
Partner Content
You may be familiar with traditional ways of earning passive income such as trading sto...
Etoro
Advertisement

Related Stories

Two Melbourne-made COVID-19 vaccines to launch Phase 1 trials

Two Melbourne-made COVID-19 vaccines to launch Phase 1 trials

Two COVID-19 vaccine candidates created by the Peter Doherty Instit...

WA to ease COVID restrictions as ICU numbers remain lower than predicted

WA to ease COVID restrictions as ICU numbers remain lower than predicted

The Western Australian government will ease its Level 2 restriction...

100 million doses per year: Moderna to construct mRNA manufacturing facility in Melbourne

100 million doses per year: Moderna to construct mRNA manufacturing facility in Melbourne

Up to 100 million Australian-made mRNA vaccines will be produced in...

“We’re ready to welcome the world back”: NZ reopening to vaccinated Aussies on 12 April

“We’re ready to welcome the world back”: NZ reopening to vaccinated Aussies on 12 April

Australian tourists will be welcomed into New Zealand without havin...