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Securities finance activity generated US$1.117 billion in revenues across January, representing a 34 per cent increase year-over-year, according to S&P Global Market Intelligence.
All asset classes outperformed in revenues YoY last month, with the exception of Asia equities,which were down 8 per cent to US$161 million, and exchange-traded products (ETPs), which dropped 22 per cent to US$46 million, the lowest monthly revenue since April 2021.
Equities generated total was US$827 million for January, up 35 per cent from the previous year.
Americas equities was a main contributor to this total with a 73 per cent increase YoY to US$464 million. While EMEA equities faced a 40 per cent rise in revenues to US$111 million.
Securities finance activity across Americas equities remained robust despite stock markets rising strongly in January, says S&P Global Market Intelligence.
More than US$319 million of revenues were generated by lending stocks with a fee greater than 500bps, this equated to 69 per cent of all revenues for Americas equities.
Average fees increased across European ETFs YoY to 141bps, but fell 27 per cent across Americas ETFs to 53bps, while Asian ETFs were down 32 per cent to 106bps.
Corporate bonds “significantly outperformed” across January according to S&P Global Market Intelligence, which notes a 51 per cent increase in revenues YoY to US$103 million. Average fees for the asset class stood at 47bps for the month.
For government bonds, revenues increased 15 per cent YoY to US$168 million, with average fees declining from its year high of 20bps over the month to 18bps.
American Depositary Receipts (ADR) saw an 81 per cent YoY increase in fees during January. Average balances decreased 13 per cent YoY, however, average fees increased 107 per cent to 144bps — representing the highest fee since March 2021.
Matthew Chessum, director of securities finance at S&P Global Market Intelligence, concludes: “Securities finance revenues remained robust throughout the month following on from a strong 2022. Americas equities continued to dominate across equities as specials activity remained strong in the US and started to pick up in EMEA.
“In fixed income, corporate bonds and government bonds remained strong contributors to overall lending revenues despite a decline in balances. January marked a strong start for 2023 and sets the tone for a strong first quarter of the year.”
