EquiLend’s Next Generation Trading (NGT) platform experienced an ‘extremely active year’ in 2022 as total trades increased 10 per cent YoY for 2022.
As market volatility drove securities finance market volumes, total trades for fixed income rose 17 per cent YoY for 2022.
According to head of EquiLend trading solutions Mike Norwood, 87 per cent of trading days in the US witnessed intraday equity market index price swings of at least 1 per cent.
Norwood says this indicates a lack of consensus in valuation and has led to demand for borrowing.
The platform saw increases across the Americas, APAC and EMEA regions, compared to 2021, that were largely on the back of increases in broker-to-broker trading and non-general collateral of 33 per cent and 38 per cent, respectively.
EquiLend reports a 1 per cent YoY rise for December for securities lending market trading on the NGT platform, with 2,421,068 trades executed during the month, generating US$2.26 trillion.
For December, volatility in the equity markets dropped to its lowest levels of the year as leverage remained subdued and investors “dialled back risk” going into year end.
According to Norwood, Q4 2022 saw relatively muted demand compared to the rest of the year, with overall trade counts down 4.6 per cent from Q3 2022.
Reflecting on trade count, Q4 2022 provided a higher trade count than any quarter prior to 2022 in securities finance data collected by EquiLend.
Norwood concludes: “Non-GC, increased activity is a focus for the industry at large as the resources to manage that portion of the trading book are heavily consumed. 2023 looks like more of the same as we continue to deal with geopolitical and macroeconomic uncertainty and await the actions of the central bankers.”
