Home Capital Group — one of Canada's largest financial institutions— currently ranks as the most shorted stock in Canada. Markit measures the short interest in a stock by calculating the amount of shares that are out on loan.
Home Capital Group recently saw an 18 percent share sell-off and the cost to borrow its shares jump 10 percent after second-quarter results showed fewer mortgage starts than expected. Shares on loan now total 31.9 percent, according to Markit.
That's followed closely behind by Canadian Western Bank, which has 54 percent of its $19 billion portfolio in real estate, personal loans and mortgages. About 27.7 percent of its shares are on loan, making it the fourth most shorted stock in the country.
Genworth Mi Canada, which underwrites private residential mortgages, has not only seen its stock slide approximately 22 percent in the last 12 months, but the number of short holdings increased to 19.3 percent, Markit said.
"Short sellers have been trying to call the top of the Canadian property market for some years now, which has proven to be a tricky trade as the continued cheapness of credit has continued to propel local demand and prices," the report, led by Markit analyst Relte Stephen Schutte, said.