Sembcorp (SCI SP) is Singapore’s only crowded short: a USD 7.8B integrated energy company with short interest at 11.8% of float and a 70 squeeze score.

Short interest has doubled since February as the stock fell — momentum shorting, after analysts cut forecasts. It fell earlier in the year as the stock rose.

Borrow costs have more than doubled, to 5.5%, and the long/short ratio is below 1.0 — three months of battleground, shorts building while longs hold steady.

• Sembcorp Industries (SCI SP) is a Singapore-based integrated energy company with a market capitalization of USD 7.8 billion. It generates renewable and conventional power across Asia, operating in 10 countries, with China and India its two largest markets.

• It is Singapore’s only crowded stock, with short interest at 11.8% of float and a squeeze score of 70.

• Short interest has doubled since February in both share count and percent of float, and the stock has fallen 26% from its April peak to its July low. Building shorts into a falling price is momentum shorting, or “piling on”: short sellers are reacting to bad news or positioning for more of it.

• The negative correlation works in reverse as well: short interest falls when the stock rises, as shorts cover (buy) on the way up.

• Negative fundamental news is adding to selling pressure and reinforcing the downtrend.

• Analysts are not calling for sells and most ratings are still buys, but hold ratings are increasing as the stock falls, so the aggregate rating is following the price down.

• Shorts are building because analysts cut profit forecasts sharply and warned that earnings may miss expectations.

• The crowded score has been ticking up alongside the larger short position and now sits at 70, its highest reading of the year.

• With the stock now bouncing off its lows, the squeeze score sits at 70, having printed 72.5 the day before — its first move through the key 70 level this year.

• Financing rates traded under 2.5% all year but recently hit 5.5%. That is both a sign the trade is getting crowded and a direct increase in the cost of carrying the short.

• Despite aggressive short selling, long investors have not abandoned the stock. Longs first declined and then flattened while shorts kept building, taking the long/short ratio from above 2.0 to below 1.0 — an ongoing battleground situation trending down to 0.8.

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