Global securities lending revenues up for third month, says IHS Markit
08 December 2020 US
Image: Tryfonov/adobe.stock.com
IHS Markit revealed its securities lending report for November reporting that global securities lending revenue hit $742 million, marking the third consecutive month of increasing returns following a challenging environment during the summer.
Global revenues declined by 1 percent year-on-year (YoY) in November, but increased 3.6 percent month-on-month (MoM), according to IHS Markit.
European and US equity revenues trended higher in November, with US equity revenues coming in at $274 million, a 30 percent YoY increase and 6 percent MoM increase.
The most revenue generating US equity in November was Inovio Pharmaceuticals, whose borrow cost soared after reporting earnings at the beginning of the month.
European equity revenue increased 25 percent YoY for November, following October where revenues increased by 17 percent YoY.
German equity lending revenues totaled $29.4 million for November, a 73 percent YoY increase and a 7 percent MoM decrease, Germany continued to be bolstered by Varta, which delivered $16 million in November revenue, the fourth-consecutive month that the German battery maker was the top revenue generating security globally.
Across the pond, Americas equity revenues came in at $300 million, a 16 percent YoY increase, and the largest monthly return since July which saw revenue at $436 million.
In Asia, the largest market, Japan, saw equities deliver $42.5 million in November revenues, a decline of 32 percent YoY.
Hong Kong equity lending revenues continued to trend higher in November with $26 million in revenue reflecting a 3.5 percent YoY increase, extending the recovery from the year-to-date low point observed in September.
The short sale ban in South Korea continues to limit lending revenue, with $8.8 million in November revenue being the lowest for any month of 2020.
IHS Markit concludes that through the first 11 months of 2020 global securities lending returns of $8.4 billion reflect a decline of 9.1 percent compared with the first 11 months of 2019, a result almost entirely driven by lower fee spreads with year-to-date average global loan balances increasing by 3 percent.
Sam Pierson, director of securities finance at IHS Markit, says: “Following a lackluster Q3, when global quarterly revenues posted the first double-digit YoY decline since Q2 2019, down 13 percent, Q4 appears on pace to notch the second, with revenues down 11 percent quarterly-to-date through November; the uptrend in daily revenues throughout November suggests a better result is likely heading into December.”
Global revenues declined by 1 percent year-on-year (YoY) in November, but increased 3.6 percent month-on-month (MoM), according to IHS Markit.
European and US equity revenues trended higher in November, with US equity revenues coming in at $274 million, a 30 percent YoY increase and 6 percent MoM increase.
The most revenue generating US equity in November was Inovio Pharmaceuticals, whose borrow cost soared after reporting earnings at the beginning of the month.
European equity revenue increased 25 percent YoY for November, following October where revenues increased by 17 percent YoY.
German equity lending revenues totaled $29.4 million for November, a 73 percent YoY increase and a 7 percent MoM decrease, Germany continued to be bolstered by Varta, which delivered $16 million in November revenue, the fourth-consecutive month that the German battery maker was the top revenue generating security globally.
Across the pond, Americas equity revenues came in at $300 million, a 16 percent YoY increase, and the largest monthly return since July which saw revenue at $436 million.
In Asia, the largest market, Japan, saw equities deliver $42.5 million in November revenues, a decline of 32 percent YoY.
Hong Kong equity lending revenues continued to trend higher in November with $26 million in revenue reflecting a 3.5 percent YoY increase, extending the recovery from the year-to-date low point observed in September.
The short sale ban in South Korea continues to limit lending revenue, with $8.8 million in November revenue being the lowest for any month of 2020.
IHS Markit concludes that through the first 11 months of 2020 global securities lending returns of $8.4 billion reflect a decline of 9.1 percent compared with the first 11 months of 2019, a result almost entirely driven by lower fee spreads with year-to-date average global loan balances increasing by 3 percent.
Sam Pierson, director of securities finance at IHS Markit, says: “Following a lackluster Q3, when global quarterly revenues posted the first double-digit YoY decline since Q2 2019, down 13 percent, Q4 appears on pace to notch the second, with revenues down 11 percent quarterly-to-date through November; the uptrend in daily revenues throughout November suggests a better result is likely heading into December.”
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