PASLA: Asia’s securities lending market continues to see growth
08 March 2018 Hong Kong
Image: Shutterstock
Asia’s significant growth profile is unlikely to change anytime soon, according to Dane Fannin, head of capital markets for Asia Pacific at Northern Trust, speaking at the 15th Annual Pan Asian Securities Lending Association (PASLA) conference.
During the welcome speech, Fannin, who serves as co-chair of the conference, suggested that conversations in this region are markedly “less defensive, more optimistic and focused more towards growth and opportunity, which is exciting, and it’s not hard to understand why”.
There are currently nine active lending markets in Asia, which continue to yield better returns than Europe and the US on a normalised basis, according to Fannin.
In addition, there are a range of emerging markets such as the Philippines, India, Indonesia and China, which present “significant opportunity” for industry participants in the long term.
Fannin explained that from a beneficial owners perspective the industry is seeing increased engagement in many institutions, who recognise the benefits of a securities lending programme.
He added that there also been an increase in assets under management from hedge funds in the region, which is helping to steer a healthy demand profile in Asia.
In addition, Fannin noted not to forget about Asia’s fixed income and repo markets as they continue to develop. He suggested that this space is becoming a lot more relevant as firms pursue strategies of optimisation.
According to Fannin, there is a very vibrant securities lending market in Hong Kong and the securities lending framework is often used as a benchmark for others in the region.
Fannin said: “There is a lot of change here and the city does well to embrace the change, although it is not difficult to see why if one observes the successful implementation of innovative reform such as the connect platforms.”
During the welcome speech, Fannin, who serves as co-chair of the conference, suggested that conversations in this region are markedly “less defensive, more optimistic and focused more towards growth and opportunity, which is exciting, and it’s not hard to understand why”.
There are currently nine active lending markets in Asia, which continue to yield better returns than Europe and the US on a normalised basis, according to Fannin.
In addition, there are a range of emerging markets such as the Philippines, India, Indonesia and China, which present “significant opportunity” for industry participants in the long term.
Fannin explained that from a beneficial owners perspective the industry is seeing increased engagement in many institutions, who recognise the benefits of a securities lending programme.
He added that there also been an increase in assets under management from hedge funds in the region, which is helping to steer a healthy demand profile in Asia.
In addition, Fannin noted not to forget about Asia’s fixed income and repo markets as they continue to develop. He suggested that this space is becoming a lot more relevant as firms pursue strategies of optimisation.
According to Fannin, there is a very vibrant securities lending market in Hong Kong and the securities lending framework is often used as a benchmark for others in the region.
Fannin said: “There is a lot of change here and the city does well to embrace the change, although it is not difficult to see why if one observes the successful implementation of innovative reform such as the connect platforms.”
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