Hedge funds are continuing to bet against Europe’s travel industry, with several brand-name managers growing their shorts in travel staples such as EasyJet and TUI, amid concerns the fallout from the coronavirus (Covid-19) outbreak could impact the continent’s tourism sector.
Hedge funds are continuing to bet against Europe’s travel industry, with several brand-name managers growing their shorts in travel staples such as easyJet and TUI, amid concerns the fallout from the coronavirus (Covid-19) outbreak could impact the continent’s tourism sector.
AQR Capital Management, the USD186 billion quantitative hedge fund, and London-based long/short giant Marshall Wace, were among those holding bets against TUI in the past month, according to regulatory disclosures.
TUI shares surged in February in the face of hedge funds’ bearish stance, with its stock price reaching 967.8p at one point on Tuesday, up from 787.6p at the start of the month. The rise comes on the back of a 7.7 per cent increase in turnover in the three months to the end of December, with the Anglo-German travel and tourism firm capitalising on the collapse of rival Thomas Cook with a surge in bookings.
Elsewhere, AQR still holds a 2.29 per cent short in EasyJet, which remains one of the most heavily-shorted European airline stocks, according to regulatory disclosures. Citadel Europe registered a fresh 0.63 per cent short in early February, while Marshall Wace and Greenvale Capital also continue to bet against the London-based low-cost carrier. EasyJet’s price stood at 1,504.5p on Thursday morning, up from 1,393p at the start of February. Citadel Holdings has also taken out short positions in Wizz Air, the Budapest-based budget airline.
With the number of Covid-19 diagnoses still rising, flight restrictions to mainland China have sparked a sell-off in oil over the past week, with industry observers weighing up a potential hit to the tourism sector globally.
