(Reporting by Carolina Mandl in New York; Editing by Mark Porter)
By Carolina Mandl
NEW YORK, March 27 (Reuters) - Global hedge funds cut
their exposure to U.S. banking stocks to a near 10-year record
low and fled lending-sensitive shares amid the banking turmoil
that began earlier this month, Goldman Sachs said in its prime
services weekly report.
An indicator of how bearish or bullish hedge funds are
positioned showed that investors became more pessimistic. Their
long positions in banking divided by short positions ended the
period March 17-23 at 1.28, near 10-year lows. In the beginning
of 2023, it was at 1.52, Goldman said.
A low ratio indicates a more bearish outlook.
Fears of a credit crush in a potential recession also led
hedge funds to scale down their exposure to firms exposed to
credit to the lowest level in nearly five years, the report
said, based on Goldman Sachs clients' books.
"Financials were net sold in eight of the past nine weeks
and this week saw the largest notional net selling in more than
a year, driven by short and long sales," the report said.
The bank said that overall its clients' books were modestly
net sold on the week.
Following the collapse of U.S. lenders Silicon Valley Bank
and Signature Bank and the Swiss government's orchestrated
takeover of troubled Credit Suisse earlier this month,
global regulators and central banks have taken measures in an
attempt to contain jittery markets.
Despite their bearish views of financials, hedge funds
scooped up stocks in healthcare and technology, media and
telecom.
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