Page 17 - Securities_Lending_Market_Report_-_June_2022

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Securities Lending Market Report | June 2022

Equities

Fig 4 - DataLend

European Equity Market

4.00 0.35
Lendable Value (Trillions €) 2.50 0.25 On-Loan Value (Trillions €)
3.50
0.30
3.00
0.20
2.00
0.15
1.50
0.10
1.00
0.50
-
-
Jan 2022 Feb 2022 Mar 2022 Apr 2022 May 2022 Jun 2022 0.05
Group Lendable On-Loan Balance

2022 should have been the year that kick started the global economy post pandemic, however geopolitical tensions quickly
dampened that spark.
There was a sharp selloff in European equities over Q1 22 as the market witnessed a flight to quality to safer havens in a period
of unpredictable volatility. As a result, a decrease in Equities posted as collateral was met with an increase in Cash collateral being
utilised in the market. This resulted in average balances on loan being up 14% at $265bn in H1 2022 versus H1 2021.

Fig 5 - S&P Global Inflation in the euro region accelerated beyond already Travel and tourism suffered as short-lived hope turned
record levels, defying expectations for a slowdown and into misery for the European carriers and holiday
European Equity Market Cash vs Non-Cash
complicating monetary policy for ECB as well as other providers. Closing airspace coupled with rising fuel
central banks. The Bank of England posted rate rises to prices and staffing issues due to covid meant there was
90.00 300.00 combat soaring inflation as all eyes turned to the ECB to an increase in directional demand in the sector with the
On-Loan vs Cash (Billions €) 60.00 200.00 On-Loan vs Non-Cash (Billions €) The current Macroeconomic environment and volatility Deutsch Lufthansa, IAG and TUI.
80.00
most popular securities being Air France, SAS AB, Finnair,
follow suit and take action.
250.00
70.00
Despite there still being a cloud of negativity in the
forced companies into delaying significant corporate
50.00
150.00
40.00
activity which would have been forecasted emerging from
European markets the industry is performing well and both
30.00
100.00
the pandemic keeping revenue derived from specials
revenues and on loan balances are up year over year.
20.00
outside of directional plays quieter than anticipated. That
10.00
-
-
Electricite de France Sa (EDF FP) undergoing a heavily
Jan 2022 Feb 2022 Mar 2022 Apr 2022 May 2022 Jun 2022 50.00 being said we still witnessed some capital raising with
discounted and successful rights issue of 3 billion euros
Group Balance vs Cash Group Balance vs Non Cash In March and Air France (AF FP) launching a EUR2.3bln
rights issue through issuance of 1,928m new shares in
May. The first half of the year was rounded off with a
special cash distribution by Lundin Energy (LUNE SS)
after the successful merger of Lundin Energy and Aker BP
in June the distribution being in the region of $7.70 per
share.