Trading Analysis - 7th Jan 2019


7 January 2019

End of Day

After an initial slow start trading really really seemed to kick off after 9:30am. This was after a 100K Sell at 39.75p knocked the nett trade position just negative. The price was upped again and we saw the Buy-Sell spread steadily tightening towards 11AM.

A couple of Bed & ISA trades appear - pinned to the bottom of the advertised Bid band - as BeingPatient pointed out this allows the greatest number of shares to be converted from trading to ISA account within the 20K (or other personal investment limits) of the ISA account. These combination trades are part Sell, part Buy as shown by the colouring on the diagram - you can see a third combination pair one pop up just after noon.

There are quite a few large Buys and Sells today - 1.2M of the former of 50K or more in size, and 1.1M of the latter of similar sizes. The overall balanced volume of these and the balanced distribution during the day (the MM nett trades position never gets more than 300K out of balance) suggests that these trades are coming from PI's that are simply rolling over positions following the Xmas-NY holiday break. None of the Sells are larger than 100K - so it does not look like a balance of PI Buys and MM's taking blocks of shares from their tame seller to fill in for these Buys  as the latter are usually 250K or larger.

There currently appears no obvious desire to drive the price down - PI buys are in balance with PI Sells, and in fact the SP has increased by 4.4% on the day. Is this a sign that the MM's short position has been closed and they are prepared to (in fact it is not a matter of them allowing it, the MM's would have no choice but to) let the price rise. There is no other evidence to encourage such a point of view, so this may simply be a rerun of the 12th-19th Dec rise from 36p to 48.5p - a temporary blip so that MMs can charge an average of 42-43p per share sold, with a subsequent walkdown during which they actually take shares off their seller at somewhat less than this.

Or it may not be just another cycle, and we've finished for good with the current share overhang - that would be a load off the MM's minds, given they would not wish any short position to persist into a period of very strong positive newsflow (remember the spanking the MM's short position got on the release of the Sojitz news.)

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