DataLend: August 2024 Securities Lending Revenue Down 12% YoY to $831 Million
‘Specials’ slump as equity cash markets continue strong run
September 4, 2024
NEW YORK (September 4, 2024)—The global securities finance industry generated $831 million in revenue for lenders in August 2024, according to DataLend, the market data service of fintech EquiLend. The figure represents a 12% decrease from the $945 million generated in August 2023.
Global broker-to-broker activity, where broker-dealers lend and borrow securities from each other, totaled an additional $221 million in revenue in August, down 8% year-over-year.
The equity trends observed in July largely held true for August with U.S. equity lending revenue declining 23% year-over-year. Average fees remained well below their 2023 levels with the U.S. posting a 28% dip in borrow cost from the same period last year. Declining fees have been indicative of fewer securities trading “special” as market indexes continue to rise. In August, revenue generated from specials was down 30% compared to August 2023.
Though equity revenues declined across global regions, Taiwanese stocks remained a bright spot in APAC, generating the second most revenue globally and a 44% increase year-over-year. In EMEA, the UK and France continued to perform well versus 2023, with revenue increases of 39% and 62% respectively.
Even with central bank rate cuts likely on the horizon in the U.S., sovereign debt lending continued to warm in August with a month-over-month average fee increase of 22% for U.S. treasuries. Lending revenue for U.S. government debt climbed 18% year-over-year.
Corporate debt continued to cool off with a 20% decline in global revenue year-over-year. The dip was largely driven by a 32% decline in U.S. investment–grade corporate lending revenue.
The top five earning securities in August were Sirius XM Holdings Inc. (SIRI US), Cassava Sciences Inc. (SAVA US), Beyond Meat Inc. (BYND US), Tempus AI Inc. (TEMUS) and Enbridge Inc. (ENB US). The five securities in total generated $109 million in revenue for the month.
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