EMEA equities borrow fees spike after enduring COVID-19 doldrums
29 June 2020 New York
Image: T.Dallas/Shutterstock.com
DataLend, the securities finance market data division of EquiLend, has published a report revealing the impact of COVID-19 on the securities lending market over the past four months.
Several specials in Europe, Middle East and Africa (EMEA) have significantly driven demand and revenue across the market, with some specials’ fees hitting, and briefly exceeding, 70bps only weeks after regional average borrow fees languished at a three-year low.
Earlier in March, DataLend calculated that fees to borrow EMEA equities averaged 43.67bps, the lowest value at any point within the past three years. However, as short selling bans in Europe were lifted in May and equity markets started to bounce back, demand to borrow EMEA equities has made a dramatic climb in recent months.
According to DataLend, there has been a momentous month-on-month gain in demand as the top-five stocks earned over $10 million more in revenue when comparing April versus May.
All in, EMEA’s top-five earners brought in $23.63 million in May, up from $13.55 million in April.
German equities dominated the tables across April and May with lWirecard
, the scandal-ridden fintech giant, unsurprisingly taking the top spot for borrow fees for both months.
As accusations of accounting mismanagement by payments firms intensified, lenders were able to reap revenue of $5.55 million in April and $8.98 million a month later.
Elsewhere, Deutsche Lufthansa, one of Europe’s largest commercial airlines, came in second place for both months as investors expressed jitters over the continent’s uncertain return to normal travel conditions.
The German carrier landed lenders $2.63 million in April and $5.38 million in May.
Meanwhile, Varta, the car battery manufacturer, and Grenka, a business solutions provider, also kept their German peers company among DataLend’s monthly top-five earners lists.
Other headline names include Groupe Casino, the French mass-market retailer and Intrum a Swedish financial services and payments service provider.
Each firm was trading warm prior to the major regional COVID-19 outbreaks in Q1 but demand has since ratcheted most of them up to red-hot specials levels.
Several specials in Europe, Middle East and Africa (EMEA) have significantly driven demand and revenue across the market, with some specials’ fees hitting, and briefly exceeding, 70bps only weeks after regional average borrow fees languished at a three-year low.
Earlier in March, DataLend calculated that fees to borrow EMEA equities averaged 43.67bps, the lowest value at any point within the past three years. However, as short selling bans in Europe were lifted in May and equity markets started to bounce back, demand to borrow EMEA equities has made a dramatic climb in recent months.
According to DataLend, there has been a momentous month-on-month gain in demand as the top-five stocks earned over $10 million more in revenue when comparing April versus May.
All in, EMEA’s top-five earners brought in $23.63 million in May, up from $13.55 million in April.
German equities dominated the tables across April and May with lWirecard
, the scandal-ridden fintech giant, unsurprisingly taking the top spot for borrow fees for both months.
As accusations of accounting mismanagement by payments firms intensified, lenders were able to reap revenue of $5.55 million in April and $8.98 million a month later.
Elsewhere, Deutsche Lufthansa, one of Europe’s largest commercial airlines, came in second place for both months as investors expressed jitters over the continent’s uncertain return to normal travel conditions.
The German carrier landed lenders $2.63 million in April and $5.38 million in May.
Meanwhile, Varta, the car battery manufacturer, and Grenka, a business solutions provider, also kept their German peers company among DataLend’s monthly top-five earners lists.
Other headline names include Groupe Casino, the French mass-market retailer and Intrum a Swedish financial services and payments service provider.
Each firm was trading warm prior to the major regional COVID-19 outbreaks in Q1 but demand has since ratcheted most of them up to red-hot specials levels.
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