Global securities lending revenue faces 20% YoY decline, reports DataLend
07 May 2024 US
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The global securities finance industry has faced a 20 per cent year-on-year (YoY) decline in revenue for April 2024, generating US$846 million for lenders, according to DataLend.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totalled an additional US$242 million in revenue for April, a 13 per cent fall YoY.
Global equity lending revenue declined due to “lagging performance” in the US and EMEA, says the market data service of fintech EquiLend.
US equities posted a 28 per cent decline in revenue YoY due to a 32 per cent dip in fees.
The Trump Media & Technology Group (DJT) represented the security trading the most ‘special’ for the month, but a limited supply of 2.5 million lendable shares capped potential revenue.
In EMEA, equity revenues were down 29 per cent, owing primarily to a 24 per cent drop in balances. On the other hand, APAC equity revenue was flat from 2023 due to improved revenue performance in Taiwan (+57 per cent) and Japan (+7 per cent).
In Japan, a 28 per cent increase in fees offset a 16 per cent drop in balances. In Taiwan, a 57 per cent rise in balances accounted for the improved revenue.
Global fixed income revenue declined 15 per cent YoY, says DataLend, due to flat sovereign lending performance. The market data service also reports a 36 per cent decline in corporate debt revenue.
Corporate debt performance was down across the board, with investment-grade issuances generating 26 per cent less revenue and high-yield issuances garnering 10 per cent less revenue.
The average fee for corporate debt was down 41 per cent globally, which drove the overall dip.
The top five earning securities in April were Trump Media & Technology Group (DJT US), Lucid Group (LCID US), ImmunityBio (IBRX US), SGS SA (SGSN SE) and B Riley Financial (RILY US).
In total, the five securities generated more than US$67 million in revenue for the month.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totalled an additional US$242 million in revenue for April, a 13 per cent fall YoY.
Global equity lending revenue declined due to “lagging performance” in the US and EMEA, says the market data service of fintech EquiLend.
US equities posted a 28 per cent decline in revenue YoY due to a 32 per cent dip in fees.
The Trump Media & Technology Group (DJT) represented the security trading the most ‘special’ for the month, but a limited supply of 2.5 million lendable shares capped potential revenue.
In EMEA, equity revenues were down 29 per cent, owing primarily to a 24 per cent drop in balances. On the other hand, APAC equity revenue was flat from 2023 due to improved revenue performance in Taiwan (+57 per cent) and Japan (+7 per cent).
In Japan, a 28 per cent increase in fees offset a 16 per cent drop in balances. In Taiwan, a 57 per cent rise in balances accounted for the improved revenue.
Global fixed income revenue declined 15 per cent YoY, says DataLend, due to flat sovereign lending performance. The market data service also reports a 36 per cent decline in corporate debt revenue.
Corporate debt performance was down across the board, with investment-grade issuances generating 26 per cent less revenue and high-yield issuances garnering 10 per cent less revenue.
The average fee for corporate debt was down 41 per cent globally, which drove the overall dip.
The top five earning securities in April were Trump Media & Technology Group (DJT US), Lucid Group (LCID US), ImmunityBio (IBRX US), SGS SA (SGSN SE) and B Riley Financial (RILY US).
In total, the five securities generated more than US$67 million in revenue for the month.
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