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Securiti es Lending Market Report | June 2023

>>> APAC

In APAC, the post-Covid reopening of China was eagerly anti cipated but has largely been underwhelming. China’s sluggish Fig 3 - FIS Global
economic growth has persisted as consumer spending and manufacturing acti vity conti nues to slow. At the centre of the
weak consumer senti ment is the challenging property market as housing sales and prices conti nue to decline. This has APAC Equity Market
resulted in the inability for some developers to service bond repayments, which has led to sizeable equity issuances to
raise capital. Given these challenges and renewed corporate acti vity in the Chinese property sector, it remains popular for 1.65 0.35
directi onal trading acti viti es. 1.60 0.30
In Australia, the lithium sector was a core directi onal short Elsewhere in Asia there has been much to be encouraged 1.55 0.25
play in Q1, parti cularly for companies that have yet to start about; in February Taiwan lift ed short sell restricti ons that 1.50 0.20
producti on, as lithium prices declined due to weak electric had been introduced in 2022, South Korean authoriti es Lendable Value (Trillions $) 1.45 0.15 On-Loan Value (Trillions $)
vehicle sales in China. Lithium prices rebounded during Q2 may consider a full resumpti on of short selling this year, 1.40 0.10
on renewed sales in China and in conjuncti on with corporate Malaysia expanded its universe of short sell eligible stock
acti vity resulti ng in short covering across the sector. The in June, Indonesia lift ed a short sell ban which had been in 1.35 0.05
rising interest rate environment and the banking sector place since 2020 and reopened the onshore SBL market 1.30 0.00
volati lity seen globally renewed directi onal trading interest whilst Philippines announced the acceptability of off shore Jan 2023 Feb 2023 Mar 2023 Apr 2023 May 2023 Jun 2023
in the banking sector. This was driven by investor margin collateral. Although Indonesia and Philippines are sti ll not Group Lendable On-Loan Balance
compression concerns and short-term cash funding trades readily accessible to off shore lenders, they have made very
for dividend reinvestment plans. positi ve strides with conti nued opti mism for future reforms.
Japan has been the best performing equity market in the
region as the Bank of Japan’s yield curve control maintained
low interest rates and a weak yen, creati ng an environment Fig 4 - FIS Global
for domesti c and internati onal funds to positi on to the long
side. Corporate acti vity for the period was up signifi cantly APAC Equity Market Cash vs Non-Cash
year-on-year, though this was primarily driven by Japan Post
Bank Co Ltd aft er its parent company, Japan Post Holdings, 180.00 300.00
Lendable Value (Billions $) 120.00 200.00 On-Loan Value (Billions $)
completed a large share sale to the public. 160.00 250.00
140.00
100.00
150.00
80.00
100.00
60.00
40.00
20.00
0.00
-
Jan 2023 Feb 2023 Mar 2023 Apr 2023 May 2023 Jun 2023 50.00
Group Balance vs Cash Group Balance vs Non-Cash