Social gaming firms and Hello Kitty creator most shorted stocks in Japan -Markit

TOKYO Tue Jan 21, 2014 10:03pm EST

TOKYO Jan 22 (Reuters) - Social gaming firms DeNA Co Ltd and Gree Inc and Hello Kitty-creator Sanrio Co Ltd are the three most shorted stocks in Japan's Topix 500 index, ahead of the quarterly earnings season, data provider Markit said.

DeNA has 22.87 percent of its outstanding shares out on loan and Gree has 17.39 percent, Markit data showed, as the two companies, which saw rapid growth in recent years, have been facing some headwinds.

DeNA is to report its quarterly earnings on Feb. 5, while Gree will follow on Feb. 14.

Credit Suisse last week raised the target prices on both companies as it factored in "increased risk tolerance in the equity market", even though it saw little to lift their earnings and said they needed new hit mobile game titles.

Shares in DeNA dropped 22 percent in 2013, sharply underperforming a 52 percent rise in the Topix 500 index - its best yearly gain since 1999.

The DeNA shares rocketed 93 percent in 2009 and another 59 percent the following year, but are down nearly 50 percent from a record high set in August 2011.

Shares of rival Gree have also been battered. The stock was down 22 percent last year after slumping nearly 50 percent in 2012. It jumped 157 percent in 2011.

By contrast, the Topix 500 index has an average of 1 percent of total shares out on loan, down from 1.5 percent two years ago, as Japan's massive fiscal and monetary stimulus, known as "Abenomics", propelled Japanese equities higher last year.

Sanrio, the creator of the Hello Kitty character, was the third-most shorted stock, at 13.36 percent of its outstanding shares, up from 10.1 percent a month ago.

It was followed by chip-making equipment producer Advantest Corp at 11.28 percent, home electronics retailer Yamada Denki Co Ltd at 10.79 percent and Nippon Paper Industries Co Ltd at 10.74 percent. (Reporting by Dominic Lau; Editing by Jeremy Laurence)

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