Insight
April 2026
The Purple Issue 22
Securities Finance Market Review: Q1 2026
AI crowding, regional winners, and why borrow demand stayed busy
Mike Norwood, Head of EquiLend Trading Solutions | Max Baker, EquiLend Data & Analytics Product Specialist
NGT Trading Volumes
| Q1 Trades | Q1 Notional | YoY Trade Growth | March Record Month |
|---|---|---|---|
|
11.34M |
$13.6T |
+25.58% |
4.31M / $5.22T |
EquiLend Data & Analytics Market Data
| Q1 Revenue | YoY Revenue Growth | Biggest Mover (YoY): Asia |
|---|---|---|
|
$3.84B |
+31% |
$884M / +48% |
Q1 did not tiptoe into 2026; it kicked the door in. NGT processed a record 11,335,376 trades against $13.6 trillion in notional, up 25.58% versus Q1 2025 and 8.3% versus Q4. March alone reset the bar at 4.31 million trades and $5.22 trillion in notional. On March 23rd, the platform recorded its busiest single day ever with 226,370 trades printed.
According to EquiLend Data & Analytics securities lending revenue reached $1.24 billion in January, $1.11 billion in February, and $1.49 billion in March bringing the total to $3.84 billion for Q1 overall, up 31% year-on-year.
But market conditions were not the only fuel in the tank. Continued platform adoption and new-client growth also mattered, particularly as clients leaned harder on NGT to cope with volatility, tighter inventory management, and the operational strain that comes with faster settlement cycles and less room for error. The result was record loan balances with $4.2 trillion on loan in Q1, reinforcing the strength and depth of activity across the market.
AI Stopped Being One Trade and Became a Full Contact Sport
AI remained the quarter’s biggest sector driver, but by Q1 it was no longer a clean upside story. It became a sorting machine. Information Technology remained the top sector by notional flow on NGT, reflecting both conviction and caution. Likewise, Technology continued to lead revenue generation at a sector-level, with lenders earning $464 million globally from IT equities.
In January, crowded semiconductor longs and powerful flows into Korea and Taiwan drove hedging around the AI winners. By February, the conversation got less tidy: semiconductors and infrastructure beneficiaries still had momentum, while software and services were being repriced as investors asked who would benefit, who would be disrupted, and who was simply priced for perfection. That is usually good news for securities finance. Underperformance, crowding, and valuation sensitivity create borrow demand, and Q1 had all three in size.
Revenue earnings told the same story. Despite continued strength in semiconductors, fueled by the AI-wave, investor skepticism remained firmly in place. U.S.-based SEALSQ (LAES), along with Korean giant Hanmi (042700 KS) and Taiwan’s GlobalWafers (6488 TT) were among the top securities lending revenue earners in the past quarter at $7.9 million, $6.5 million, and $4.4 million respectively. On the surface, all three companies have announced significant advancements and revenue growth so far this year. However, with lingering question marks around fundamentals in some cases and intensifying competition, the market looks to names like these three to bet against the semiconductor rally.
Top Names Told the Story Before the Indices Did
February’s most-traded lineup – MSTR, LITE, CHTR, AMCR, and SMCI – remained heavily shaped by AI bifurcation and valuation stress. MSTR, LITE, and SMCI sat right in the blast radius of the AI debate, where momentum, crowding, and margin-compression fears made hedging almost unavoidable. By March, the list shifted to MSTR, RIVN, LYV, CHTR, and KMB, signaling a shift toward a broader, more catalyst-driven environment. Rivian drew fresh attention after Uber agreed to invest up to $1.25 billion and deploy autonomous R2 vehicles as robotaxis. Live Nation combined strong operating momentum with an active antitrust backdrop. Charter stayed busy following approval of its Cox deal, and Kimberly-Clark picked up late-month corporate-action risk. Different names, same message: the market moved from pure AI positioning into a broader mix of event risk, relative value, and macro hedging.
The top performers from a revenue perspective played out slightly differently. Infosys ADR (INFY) led earnings globally in Q1 at $48 million, followed by Lucid Group (LCID) at $29 million and Nano Nuclear Energy (NNE) at $18 million. Infosys ADR (INFY) saw elevated borrow demand following weaker-than-expected I.T. services guidance and concerns over AI-driven disruption to outsourcing models, while Lucid Group was heavily shorted amid broader weakness across the EV sector. Nano Nuclear Energy (NNE) also emerged as a top earner amid the backdrop of the headline story of Q1, the Iran war and knock-on energy crisis, but saw heightened short demand for a completely different reason. As an early-stage nuclear energy company, they’re not expected to see significant revenue for several years. However, the stock rallied when SMR nuclear stocks were in vogue on social hype alone. This meme-stock activity drew significant short interest, making NNE one of the most active stocks in the securities lending market in Q1.
Regional Rotation Was Real, and It Was Rational
APAC was the quarter’s early overachiever. January set the tone with total trades reaching 396,048. Daily averages rose 20% in equity and 30% in fixed income, driven by capital inflow into Asia and semiconductor concentration demanded hedging. That strength was reinforced by Data & Analytics revenue, with APAC equity lending revenue up 49% year-on-year in Q1, returning $848 million. Revenue earnings were led by Taiwan, Japan, and Hong Kong on elevated balances as well as a notable comeback from South Korea generating $138 million as market participation increased significantly from the lifting of the short-sell ban.
By February, activity tilted toward EMEA, where strong European equity performance, defense leadership, industrial rotation, and continued demand in the UK, Germany, and France pulled activity west. EMEA equity lending revenue rose 76% year-on-year in January and 61% in February, making the region the fastest-growing in Q1 overall (up 68%). Within this, Sweden emerged as the standout market, generating $56 million (up 77%), as Swedish banks were particularly prominent among the top earners, driven by increased corporate event demand. As a result, the financial and industrial sectors in EMEA led growth, generating $63 million and $57 million respectively, both rising by over 70% year-on-year.
By March, regional leadership of traded assets broadened again as oil, inflation, and rates hit different markets in different ways: Canada rotated into energy and materials, Japan and Hong Kong reflected semiconductor and exporter sensitivity, and the UK saw more hedging around banks, miners, housebuilders, and travel. Same playbook, different accents: volatility creates financing demand, and regional rotation usually follows whichever market has the most to defend.
This Was Not Just an Equity Story
Fixed income quietly did a lot of the heavy lifting. Corporate debt trade counts rose 20% year-on-year; sovereign debt was up 14.7%, and March fixed income volume increased across every region. As skepticism toward the U.S. fiscal outlook grew, rising yields brought renewed demand to the asset class. North American fixed income alone generated $489 million in revenue in Q1 2026, up 22% year-on-year, driven largely by U.S. Treasuries as investors positioned around inflation risk. Corporate debt added another $124 million, with activity skewing toward names under pressure amid widening spreads. EMEA fixed income returned $222 million in the quarter, up 16% year-on-year, with sovereign volatility as the primary driver. France led at $64 million, followed by the U.K. at $51 million and Germany at $34 million, all posting growth between 20 and 30%. French OAT activity and the UK gilt market were particularly notable as political turbulence drove borrow demand for government debt throughout Q1, generating $49 million and $39 million in revenue respectively.
ETFs were even more eye-catching, with trade counts up 48.3% year-on-year and a record 763,646 ETF trades executed on NGT during the quarter. ETF lending revenue reached $187 million in Q1 2026, rising 49% year-on-year, with North America as the dominant contributor at $160 million. The quarter was defined by volatility and rapid repositioning, and ETFs proved to be an increasingly central tool for gaining or hedging exposure across asset classes. This was especially true in fixed income, where the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and iShares iBoxx $ High Yield Corporate Bond ETF (HYG) ranked among the top revenue-earning securities globally. Rising short bets on both products reflected broader investor unease over U.S. credit markets, with famed short seller Carson Block also placing bearish bets on LQD and HYG as a hedge against economic risks tied to the AI capital expenditure boom. Their prominence in the lending market underscores how fixed income ETFs have become a primary vehicle for expressing views on rates and credit conditions – accessible, liquid, and increasingly hard to ignore.
The increased demand for fixed income and ETFs told the bigger story. On NGT non-GC trade counts rose 49.19% year-on-year, non-GC notional jumped 94.3%, and broker-to-broker notional increased 63.5%. In other words: Q1 was not powered by easy general collateral and straight-line beta. It was powered by more price-sensitive borrow, more balance-sheet usage, and more clients expressing increasingly precise views across equities, ETFs, credit, and sovereigns.
Wrap-up and Look Forward
Q1 was a record trading quarter because it combined structural growth with exactly the kind of market friction that makes securities finance matter. January brought momentum and new capital; February brought rotation and dispersion, and March brought outright cross-asset stress. Each phase created a different reason to borrow, lend, hedge, or optimize collateral, and NGT captured all three. Just as importantly, NGT was not merely a scoreboard for volatility; it was part of how clients coped with it. As settlement cycles accelerate, operational tolerance shrinks, and dislocated markets demand faster decisions, clients need workflows that can absorb pressure rather than add to it. That is where NGT earns its keep.
The cleanest read-through into Q2 is this: market volatility can create the conditions for higher volumes, but platform growth is also being supported by continued client adoption, new client onboarding, and the need for more automation when markets get harder to keep up with. If Q1 proved the depth of demand, Q2 will test how much more of that demand the market wants to run electronically.
The message from securities lending revenue is the same: Q1 2026 did not just continue the momentum of a record 2025 – it surpassed it, delivering the largest Q1 returns ever for lenders. Crucially, the drivers were meaningfully broader than the equity momentum that defined much of last year. Volatility, geopolitical friction, and shifting rate expectations pulled fixed income, ETFs, and new regional markets into focus, something that a calmer quarter simply would not have allowed. A record built on dispersion, sovereign and geopolitical stress, credit repositioning, and cross-asset hedging all firing at once is a more durable one. If Q1 proved the depth of demand across the market, the conditions look firmly in place for momentum to continue and then who knows, 2026 may provide another record year in earnings.
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