Data Explorers, the leading global provider of securities financing data and daily long and short institutional fund flow insight, released survey findings following the Asian Securities Financing Forum that took place yesterday in Hong Kong.
Mark Faulkner, Founder and Director of Innovation, Data Explorers commented: "Our inaugural Securities Financing Forum in Hong Kong highlighted that Asia is the driving force for global securities lending. Whilst the regulatory environment varies across the region, the backdrop of rising securities valuations and a thriving IPO market has created a solid foundation for securities lending growth. It is remarkable that the smaller Hong Kong market has overtaken Japan as the top Asian market by securities lending revenues.
"We are delighted to have opened our office in Hong Kong and today launch our weekly broadcasts in Mandarin".
The Asian Securities Financing Forum was chaired by Steve Sedgwick, CNBC, and attracted 150 senior securities lending practitioners. Key highlights from the panel discussions and interactive voting revealed:
Asia is one of the few growth areas in the global securities lending market. Data Explorers content reveals that Asia's contribution has increased from 14% to 18% over the past year. Half the delegates predicted Asia's contribution will increase by between 20-25% over the coming year.
Hong Kong has recently taken over Japan in terms of securities lending income for the first time, according to analysis by Data Explorers. This has been driven by demand to borrow outstripping supply, leading to high fees being charged by custodians.
Respondents believed the regulatory environment will continue to evolve at different rates across the region, with some markets still in an embryonic state. The speed and clarity of regulatory reform will impact the future success of securities lending in Asia. Hong Kong's regulatory body, the SFC, was praised for its non interventionist approach during the crisis and dialogue with the market. This marked the SFC as a 'model' regulator and helped ensure the region did not experience the same declines as seen in the mature markets of Europe and the US.
Half the respondents did not believe there is a need for a central counterparty in securities lending, and are suspicious of this and do not consider it to be of interest to beneficial owners.
The results of the interactive delegate voting at the Asian Securities Financing Forum can be accessed at http://www.dataexplorers.com/hklive.
Data Explorers weekly securities financing broadcasts in Mandarin can be viewed at: www.dataexplorers.com/news
