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Securities Lending Market Report | June 2022

>>> US Corporate Bonds >>> APAC Equity

Following a back-to-back annual record-breaking pace the index is on course for the first double-digit slump in With interest rates and inflation fears driving sentiment In Australia, SBL revenues were dominated in the first
through the pandemic, high-yield issuance came to its almost 50-year history. The US investment-grade loan and increasing volatility, APAC has seen capital outflows in quarter by BHP’s delisting on the FTSE and the merger of
a screeching halt in the first half of 2022. Investors market rolled into the second quarter of 2022 at much the the first half of 2022, particularly in the emerging markets its oil and gas business with Woodside Petroleum making it
retreated from the sector due to a number of factors same slow pace set at the start of this year. Companies of Taiwan and Korea. Like the rest of the world, the Russia- into the top 4 revenue generating names for APAC, a lofty
including rate volatility, external risks increasing from the raised $367.7 billion of syndicated corporate loans in the Ukraine war has caused severe supply disruptions which position not often seen in Australia. Demand in the country
conflict in Ukraine, recessionary fears and as borrowing second quarter, down about 20% year-over-year, according have impacted the price of many commodities and these remains healthy compared to last year and as the second
costs increased, refinancing scope had narrowed. Issuance to Bloomberg league table data as of July 1. That compares were compounded by China’s continued zero-tolerance largest producer of Lithium should remain so as the demand
of $37.1 billion for Q1 2022 decreased by approximately to $460.6 billion in the second quarter of 2021. COVID-19 policy with the Shanghai lockdown in April- for lithium continues to outstrip supply and miners struggle
72% from last year’s extraordinary pace with Q2 dropping Investors in corporate debt are looking ahead with concern, May signaling an economic slowdown reality for the to scale up to meet the ever-increasing demand.
even further at $24.2 billion, the lowest second quarter after a turbulent first half as economic fears remain in place, world’s second largest economy. Taiwan has had very strong H1 driving to the top of
issuance since 2005.
the war in Ukraine, along with the hawkish stance of the China’s woes have been further exacerbated as authorities the APAC revenue chart. Top specials in Taiwan were
Investment grade U.S. corporates flooded the primary Federal Reserve. The global pool of the safest corporate took steps to de-leverage the property market and restrain dominated by Integrated Circuit, Shipping and Tech names
market in March, selling almost a quarter trillion dollars debt has already shrivelled by $805 billion so far this lending. This had a major impact on developers such as as investors reacted to over inflated sector valuations from
in new bonds, twice the monthly average of the prior year, while the global high yield market lost $236 billion, China Evergrande (3333 HK) and Shimao Group (813 2021.
ten months, and the fourth highest ever. Excess supply according to data compiled by Bloomberg. That’s the largest HK) with a number of companies now suspended after With $100bn+ of average on-loan balances, Japan
weighed on a market crushed by rising rates, geopolitics, dollar decline since records began more than 20 years ago, defaulting on debt obligations. Concerns about regulation should never be ignored, and it remains the second
concerns of an economic slowdown, fund outflows and following a borrowing spree driven by record-low funding in the tech sector also continued to worry investors highest revenue market in APAC behind Taiwan. Soaring
a weakening foreign demand. The first quarter loss for costs. despite assurances from authorities. transportation costs and demand for home delivery
investment grade buyers was the sharpest since 2008 and
South Korea enjoyed a strong H1 taking the three top contributed to the shipping industry seeing increased
spots in the APAC top 10, with Krafton (259960 KS) the profits, but investors questioned the sectors long term
gaming company taking the number 1 place as the KOSPI sustainability driving up demand to borrow. The airline
continued to drop throughout the first half of the year, sector in Japan also saw a resurgence in demand as rising
further challenging the fine balance with the regulator of global oil prices and a potential ban on Russian oil took
retail and institutional investor. its toll.