The German bank’s shares fell as much as 15 per cent before paring losses to end the day down 8.5 per cent in Frankfurt.
Short interest in Deutsche Bank reached the highest level since May on Tuesday, according to IHS Markit. It stood at 2.6 per cent of shares outstanding on Thursday, up from less than 1 per cent in early February.But hedge funds have turned their attention to Deutsche Bank, an institution that’s strengthened its balance sheet after some costly missteps years ago.
Credit default swaps on the five-year senior bonds were quoted at around 200 basis points on Friday afternoon, according to ICE Data Services, down from around 220 basis points earlier in the day. “Deutsche Bank’s recent CDS widening is in our view related to one way trades of de-risking across all market participants,” wrote analysts at JPMorgan ChaseCo. including Kian Abouhossein. “We don’t see this and the associated share price decline as a reflection of the fundamentals.”
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