Leading corporates who believe that short-selling by hedge funds is punishing their share prices have started a lobby to restrict the funds' activities.

Investor relations consultant Makinson Cowell has been taking soundings from fund managers on the difficulties hedge funds are causing for some of their corporate clients. Certain hedge funds have taken out naked shorts. Some use over-the-counter derivatives to protect their positions. Others are tending to go long on high-yielding corporate bonds and short on equities.