Securities lending revenues make for ‘second-best half year ever’ for 2023
18 July 2023 US
Image: Lemonsoup14/stock.adobe.com
Securities lending specials revenues for H1 2023 were close to ‘an all-time high’, pushing total revenues to the ‘second-best half year ever’, according to Matthew Chessum, director of securities finance at S&P Global Market Intelligence.
The sector generated US$7.02 billion in securities lending revenue during H1 2023, nearing heights not seen since 2008, where H1 2008 figures reached US$8.4 billion.
According to S&P Global Market Intelligence, Q1 2023 generated US$3.414 billion in revenue, representing a 27 per cent year-on-year (YoY) jump. While Q2 2023 accounted for US$3.695 billion, a 7 per cent YoY increase from the same period the previous year.
Strong average fees contributed to H1 2023 revenues, says Chessum. Across all equities, H1 average fees increased 19 per cent YoY to 87bps.
Average fees across government bonds inclined 34 per cent YoY to 18bps. Corporate bonds also experienced strong demand, attaining an average fee of 46bps, a 47 per cent YoY increase from H1 2022.
The specials market was one of the strongest drivers of revenues throughout the first half of the year, according to Chessum, while US equity specials experienced their best half-year period ever, increasing revenues by 44 per cent YoY to US$2.049 billion.
All top 10 generating stocks over the H1 2023 period were US equities, with AMC generating the most at US$456.4 million.
Anticipating the performance of H2 2023, Chessum concludes: “Heading into the second half of the year, elevated average fees continue to produce healthy returns.
“As the economic situation starts to evolve with a decline in the pace of interest rate hikes, a reduction in inflation and ever-increasing equity markets driven higher by the interest in artificial intelligence, H2 is shaping up to be just as interesting as H1.”
The sector generated US$7.02 billion in securities lending revenue during H1 2023, nearing heights not seen since 2008, where H1 2008 figures reached US$8.4 billion.
According to S&P Global Market Intelligence, Q1 2023 generated US$3.414 billion in revenue, representing a 27 per cent year-on-year (YoY) jump. While Q2 2023 accounted for US$3.695 billion, a 7 per cent YoY increase from the same period the previous year.
Strong average fees contributed to H1 2023 revenues, says Chessum. Across all equities, H1 average fees increased 19 per cent YoY to 87bps.
Average fees across government bonds inclined 34 per cent YoY to 18bps. Corporate bonds also experienced strong demand, attaining an average fee of 46bps, a 47 per cent YoY increase from H1 2022.
The specials market was one of the strongest drivers of revenues throughout the first half of the year, according to Chessum, while US equity specials experienced their best half-year period ever, increasing revenues by 44 per cent YoY to US$2.049 billion.
All top 10 generating stocks over the H1 2023 period were US equities, with AMC generating the most at US$456.4 million.
Anticipating the performance of H2 2023, Chessum concludes: “Heading into the second half of the year, elevated average fees continue to produce healthy returns.
“As the economic situation starts to evolve with a decline in the pace of interest rate hikes, a reduction in inflation and ever-increasing equity markets driven higher by the interest in artificial intelligence, H2 is shaping up to be just as interesting as H1.”
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