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Global Equity


 Markets in Focus







 The second half of 2020 saw global equity markets follow   and lenders reacted to the changing sentiments of their   Whilst the pattern of data relating to the availability of   Earlier in this review we considered the events in
 a path of broadly sustained growth, as they recovered from   underlying clients. Equity securities being made available   equities for securities lending clearly reflects actual market   November, when the announcement of the approval
 the lows seen in the first half of the year. As further waves   for lending rose by some 20% during the half-year, rising   events, the pattern of on-loan balances appears more   of a COVID-19 vaccine prompted one of the largest
 of the pandemic swept across the world however, markets   from €14 trillion on 30 June to just under €17 trillion   complex. Review of the S&P 500 index highlights how   momentum changes ever seen in investment markets,
 reacted violently at times. Consequently, although most   at the year-end. As discussed earlier in this report   markets rebounded strongly from a half-year low point   sparking considerable losses within the quant-based
 global indices closed 2020 up on the year, it was at times   however, key equity indices themselves rose significantly   in the final week of June, to rally strongly up until early   alternative investment management sector. More broadly,
 something of a roller coaster ride.   during this period. Consequently, most if not all of   September. In contrast during that same period, we saw   the final quarter saw wider demand to borrow equities,
 this increase was most likely directly related to asset   the value of equity securities on-loan broadly fall.   particularly in North America where a rush of Initial Public
 Inevitably, many of these global themes were played out   price appreciation, rather than new assets being made   Offerings prompted an increased demand to borrow
 in the equity securities lending markets, as borrowers   available for lending.   The reasons behind this trend are likely to be varied but   securities as traders positioned themselves around these
        are most likely associated with rising stock markets forcing   issues.
 Fig 14: Global Securities Lending Equity Market    Source: IHS Markit  short sellers to close out positions. As the rest of the year
        unfolded, we also saw on-loan balances build again into   In Europe we saw less of the trading volatility seen
 €18T  €1.1T  the final quarter, only for the market to then suffer from   primarily in North America, with on-loan balances falling
        further volatility associated with new outbreaks of the   into the year-end to close at €163 billion, compared to
        virus and related lockdowns.                €195 billion six months earlier.
        Fig 15: European Securities Lending Equity Market                        Source: IHS Markit

             €2.7T                                                                    €220B





 Total Lendable Asset  €16T  €0.95T   On-Loan Balance


         Total Lendable Asset  €2.4T                                                  €160B   On-Loan Balance














 €14T  €0.8T  €2.1T                                                                   €100B
 Jun 20  July 20  Aug 20  Sep 20  Oct 20  Nov 20  Dec 20  Jun 20  July 20  Aug 20  Sep 20  Oct 20  Nov 20  Dec 20
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