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Global Equity Markets in Focus

2019 was another year of extremes for the equity markets, On Wall Street, the DJIA went up almost 22% having Interestingly and perhaps an indicator as to how quickly Similarly, the broader economic backdrop shaped invest-
as investors experienced something of a roller coaster reached record highs day after day, whilst the S&P 500 sentiment can change, at the time of writing the VIX ment management sentiment and therefore behavior
ride. Previous concerns that the trade war between the increased by 30% and the tech-heavy Nasdaq grew by was at 18.23, reflecting the ramifications of global trade, in the equity lending markets during the second half of
US and China would spiral out of control seemed to abate 40% in value in 2019. and the Chinese economy in particular dealing with 2019. Although equity markets showed record growth,
towards the year end, and with a decisive outcome in the Coronavirus. hedge funds saw net withdrawals in the first nine months
the UK election in December, the uncertainties around The FTSE 100 in London closed near to its record high, as of 2019, perhaps reflecting how hard it can be to beat a
Brexit seemed to have been resolved, at least in the short did markets across Europe. Inevitably, our markets have not been immune to this strong index performance. As we look ahead into 2020,
term. These factors, in part, pushed equity markets to all- increasingly complex and interconnected macroeconomic it is not clear if these factors are temporary or represent
time highs. Every major global index grew through the Market volatility expressed in terms of the Chicago Board picture. We have already discussed in this report how cen- a broader structural change.
year, with many posting record highs, as central banks Options Exchange Volatility Index (VIX), had an aver- tral bank intervention and the reappearance of what are
cut interest rates and positive earnings reports drove age closing price of 15.39 in 2019, which was below its effectively buyback programmes, have influenced fixed As at the end of June 2019, there were circa €925 billion
stocks higher. 10-year average of 18.47. income markets, including lending. of equity securities on-loan from an available lendable

Fig 14: Global Securities Lending Equity Market Fig 15: European Securities Lending Equity Market

€15T €1.1T €2.6T €190B

Total Lendable Assets On-Loan Balance Total Lendable Assets On-Loan Balance

€13T €0.8T €2.1T €0
Jul 2019 Aug 2019 Sep 2019 Oct 2019 Nov 2019 Dec 2019 Jul 2019 Aug 2019 Sep 2019 Oct 2019 Nov 2019 Dec 2019
Source: IHS MArkit Source: IHS MArkit

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