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8 Securities Lending Market Report | March 2022 9

Adnan Hussain
Global Head of Securities Lending
HSBC Markets & Securities Services

Securities Lending Introduction

2021 was characterised by ups and downs, in more ways than one.
Biannual Market Review emerging markets saw turbulence in the face of successive waves of
While developed equity markets were bullish on central bank policy,

Covid-19 variants and the issuing and lifting of restrictive measures to
manage those. These trends created event and directional opportunities
for many in the lending market.
As equity markets have risen to all-time highs, it has become easier for
H2 2021 banks to fund trades within existing collateral sets, meaning many securities
financing participants are now looking to pledge collateral further down
the credit curve to facilitate a higher internal benefit. Collateral providers
have turned to instruments including American Depositary Receipts (ADRs),
Exchange Traded Funds (ETFs), investment-grade and sub-investment
grade credit, which have seen high volume and depth of issuance since
the pandemic began. Indeed, even the rush for the surety of the US dollar
has abated, which has been reflected in the spreads of many USD cross-
currency trades during most of 2021. This marks an increased risk appetite
amongst market participants. Now that economic fragility seems to have
abated, over-funding on balance sheets indeed resulted in widespread
unwinds through 2021.
Fixed income yields started and ended the year with a bang and were
muted in between. Low global interest rates created a mixed dynamic for
funding and credit, though the stark acceleration of inflation towards the
latter part of the year created significant dislocation of curves, and created a
healthy environment for opportunistic fixed-income spreads.

Adnan is Managing Director in HSBC Markets and Securities Services,
responsible for the Global Agency Securities Lending business. Adnan has
20+ years of industry experience from various senior roles in the Securities
Services both in the U.K and Canada. Adnan holds a Master of Laws (LLM)
from the University of Toronto and is a Certified Public Accountant (CPA).

As at February 2022