ANZ Falls 5.6% as Hedge Funds Bet Against Big Four Banks, June 14

ANZ shares fell 5.6% in 2026 as hedge funds doubled short positions in Australia’s big four banks to $10.9 billion. Investment bank Citi cut profit forecasts for all major lenders after the government flagged plans to end negative gearing for property investors from July 2027. Rising interest rates and slowing mortgage demand threaten bank earnings. Meyka rates ANZ a B+ with a 12-month price target of A$40.49, 18% above the current price.

Why Hedge Funds Are Shorting Bank Stocks

Hedge funds hold nearly A$11 billion in short bets across ANZ, NAB, Westpac, and CBA. This is the largest short position since 2010. Firetrail Investments, which has shorted all four banks since mid-April, said valuations are too rich for the earnings growth banks provide. Patrick Hodgens, Firetrail’s chief investment officer, stated that any earnings downgrades will be treated harshly by the market.

Profit Forecasts Fall on Mortgage Slowdown

Citi cut profit forecasts for all four banks after the Labor Government flagged ending negative gearing for residential property investors from July 1, 2027. Citi expects mortgage credit growth to fall from 7% in 2026 to 3-4% over the next 12 to 18 months. Loans to investors carry higher interest rates and are the most profitable for banks. The halving of investor loans will trim bank profits over time.

Rate Hikes and Policy Headwinds Weigh on Shares

ANZ shares closed at A$33.83 on Thursday, down 2.11% for the day. The stock has fallen 5.6% year to date, while NAB is down 15.1%, Westpac down 9.6%, and CBA down just 0.2%. Three consecutive RBA rate hikes in 2026 have pressured all four banks. Combined with inflationary pressures and negative gearing changes, demand for mortgages is expected to fall and bad debts to rise. Meyka’s technical indicators show ANZ’s RSI at 41.63, signaling weak momentum, and an ADX of 30.23 indicating a strong downtrend.

What This Means for Investors

With Meyka rating ANZ a B+ and forecasting a 12-month price target of A$40.49, the data points to limited upside from current levels. However, the stock’s dividend yield of 4.86% and book value of A$23.94 per share offer some support. ANZ faces a possible NZ$125 million liability in a New Zealand loan-disclosure class action. The interim dividend remains at 83 cents per share.

Final Thoughts

ANZ shares face headwinds from slowing mortgage demand and record short positions. With Meyka’s B+ rating and A$40.49 target, the stock offers limited downside but faces near-term pressure from earnings downgrades.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.