Hedging bets goes wonky

SECRETIVE City wheeler dealers have had their fingers burned after Morrisons posted a jump in sales yesterday.

Hedge funds had been banking on making fat profits from a slump in the supermarket chain’s share price.

Instead, the stock has soared 23% since mid-march, reaching a nine-month high.

Yesterday the Bradford-based business announced a 3.6% rise in quarterly sales, split evenly between its own stores and its growing wholesale arm.

Boss David Potts said the launch of wonky fruit and vegetables had also proved a hit. It has been selling around 1,400 tons of Wonky produce per week.

Morrisons’ share rally comes despite fears it could be hammered by a proposed merger between Sainsbury’s and Asda. Potts refused to comment on the deal but said: “We welcome vigorous competition. It is an important part of British retailing.”

There has been talk Morrisons could itself be involved in a takeover, with Amazon – with which it has a wholesale deal – mentioned as a possible suitor.

Filings show three US hedge funds have upped their “short” positions in Morrisons since February – meaning they borrow shares in the hope they will fall.

But Nicholas Hyett, analyst at broker Hargreaves Lansdown, warned: “The outlook for Morrisons is perhaps not as rosy as first glance would suggest. The sector has got more competitive and Morrisons is caught right in the middle of it.”

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