China Is World’s ‘Most Crowded’ Short, Societe Generale Says

China stocks are on the verge of a “massive short squeeze,” Societe Generale SA said, citing recent equity declines, rising short volumes and European restrictions on short sales.

Bets on declining share prices “have been building up over the past six months as hedge funds went short financials,” Todd Martin and Anthony Lee, analysts at Societe Generale, wrote in a report dated today. China is “the world’s most crowded short,” they wrote.