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Securities Lending Market Report | December 2022

APAC

>>> Equities

Equity lending in Asia Pacific remained a consistent and reliable source of revenues with a higher return than many other Fig 4 - FIS Global
global markets – looking at individual markets – with the usual suspects of Japan, Taiwan and Hong Kong leading the
tables in terms of revenue generation. That said, the level of revenues generated in the region decreased by approximately APAC Equity Market
10% YoY, lagging behind the global average increase of 20%, and this despite a strong final month to end the year. This
is in line with regional equity index movements which experienced a decrease in corporate events, IPOs and takeovers/ 1.60 0.30
mergers versus previous years. The highlights varied per country depending on the lens. 1.40 0.25
Hong Kong is usually the standout country with a higher Taiwan was the best performing market of the year in terms 1.20 0.20
1.00
number of talking points in terms of specials and fee levels of revenue generation driven by issuers such as Wiwynn
of note. However, the Hong Kong equity market continued Corp (6669) and Nan Ya Printed Circuit Board Corp (8046) – Lendable Value (Trillions $) 0.80 0.15 On-Loan Value (Trillions $)
to underperform versus its ‘peers’ reflecting lower investor both Tech driven. 0.60 0.10
confidence due to COVID-19 policies. It ended the year Japan came in second place but continues to be a volume 0.40 0.05
behind Taiwan and Japan in terms of overall revenue driven market with the highest average on loan balance 0.20
generation despite a strong December rally where Hong throughout the year. 0.00 0.00
Kong achieved first place for the month - possibly a result of Jul 2022 Aug 2022 Sep 2022 Oct 2022 Nov 2022 Dec 2022
increased confidence as COVID policies started to be eased. While Asia Pacific equity lending started on an impressive Group Lendable On-Loan Balance
The highest ranked specials of the year in APAC were driven note in H1 2022, it closed the year on a weaker H2 2022 vs.
by the Hong Kong pharmaceuticals and retail/consumer H2 2021 with revenues (-13%), lendables (-18%), balances
sectors, including Cansino Biolics Inc (6185), Koolearn (-7%) and fees (-6%) all decreasing YoY for the period, this,
Technology Holdings Ltd (1797) and Pop Mart International despite a stronger utilisation (+18%). Still, the Asia Pacific
Group (9992). equity lending market story remains a strong one to be kept
on radars in 2023.
Australia was the unexpected market of the year and saw
the highest increase in revenue growth YoY at approximately
24%, boosted by a rally across equity sectors in December
and an increase in both general collateral demand and
specials. This increase for general collateral is expected
to continue into 2023 as many local beneficial owners
currently utilising cash as the main form of OTC collateral
are moving to implement triparty collateral management
solutions and switch to fixed income and equities. The two
key specials of note at year-end were Perpetual Limited
(PPT) and Lake Resources Nl (LKE).