Record-breaking 2015 for sec lending in Asia
29 January 2016 London
Image: Shutterstock
The Asian securities lending industry raked in $672 million from lending out stocks in 2015, marking a bumper year for the region.
Last year’s figure cleared 2014’s total revenue by a cool 21 percent, according to Markit.
“Last year’s volatile Chinese markets offered ample opportunities for Asian short sellers to short shares directly exposed to the country’s economic headwinds as well as shares that came under pressure from the country’s slowing demand for commodities,” stated Markit’s regional revenue report for 2015.
“Stock borrowing activity in the region surged to multi-year highs with every major market seeing an increase in demand.”
The record-breaking year raised the bar from the previous record of $643 million achieved in 2012.
Markit attributed the increase in the value on loan as one of the main drivers behind the growth.
The average daily value of shares on loan on any given day, at $115 billion, represented a 15 percent increase on the previous year, explained Markit. This signified the largest average daily balance since 2008 when $130 billion shares were out on loan on any given day.
South Korea and Hong Kong were the two markets to generate the most year-to-year growth of all the individual Asian markets.
Both countries increased their annual revenues by more than $60 million in 2015, which, for South Korea, represents a doubling of its aggregate annual revenue.
Markit’s analysis noted that Hong Kong’s share of the region’s total revenue increased to 40 percent from 38 percent in 2014.
At the same time, Japan’s contribution to the region’s securities lending revenue fell by 5 percent to 21 percent after its own revenue dropped by $5 million.
Last year’s figure cleared 2014’s total revenue by a cool 21 percent, according to Markit.
“Last year’s volatile Chinese markets offered ample opportunities for Asian short sellers to short shares directly exposed to the country’s economic headwinds as well as shares that came under pressure from the country’s slowing demand for commodities,” stated Markit’s regional revenue report for 2015.
“Stock borrowing activity in the region surged to multi-year highs with every major market seeing an increase in demand.”
The record-breaking year raised the bar from the previous record of $643 million achieved in 2012.
Markit attributed the increase in the value on loan as one of the main drivers behind the growth.
The average daily value of shares on loan on any given day, at $115 billion, represented a 15 percent increase on the previous year, explained Markit. This signified the largest average daily balance since 2008 when $130 billion shares were out on loan on any given day.
South Korea and Hong Kong were the two markets to generate the most year-to-year growth of all the individual Asian markets.
Both countries increased their annual revenues by more than $60 million in 2015, which, for South Korea, represents a doubling of its aggregate annual revenue.
Markit’s analysis noted that Hong Kong’s share of the region’s total revenue increased to 40 percent from 38 percent in 2014.
At the same time, Japan’s contribution to the region’s securities lending revenue fell by 5 percent to 21 percent after its own revenue dropped by $5 million.
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
