Insight
Monthly Securities Finance Market Review: November 2023
Mike Norwood
DECEMBER 2023
EquiLend’s Head of Trading Solutions, Mike Norwood, shares his monthly market review for securities finance, highlighting trends seen throughout November. The following data has been measured and derived from EquiLend NGT.
Monthly Trends
November 2023 saw relatively muted securities lending demand as global equity markets saw their best return in 3 years at +9.2% and bonds got in on the action as well with U.S. Treasury 10-year bond yields down 60bps on encouraging inflationary measures and a second pause in Fed rate hikes. Globally, 2,636,548 trades were executed across EquiLend’s NGT platform versus $2.38 trillion, down 2% from October but up +11% from November 2022.
Global Borrowing and Lending
With equity demand subdued as volatility trended lower (VIX and V2TX), fixed income continued to demonstrate strength. November represented a new platform high (surpassing October) with 771k trades printed (+4% m/m and +38% y/y). Fixed income activity was 29% of total platform activity and U.S. corporate investment grade bonds were in focus. U.S. Treasuries saw increases of +13% month over month as the electronification of trading in the government bond space is finally starting to resonate with participants.
Equity volumes were down -4% month over month and up +3% from November 2022. U.S. volumes were flat with all other regions experiencing softer demand. South Korean trade activity was down -53% as they rolled out a short sale ban which drove the downturn in trade. The downward trend was most apparent in APAC (-16%) with Japan driving the majority of the weakness with -19% reduction as they continue fighting inflation which has driven economic contraction and resulted in a new stimulus package.
Going into the end of the year much will depend on economic indicators and central bank activity. It appears that a soft landing in the U.S. is still priced in; however, with a government shutdown only temporarily avoided and with the Fed not ruling out further rate hikes, there is the chance that any contrary indicators could make for a return to volatility.
Sectors Focus
Within global equities, NGT’s most in-demand sectors were:
Follow securities finance trends, trading analysis and commentary with EquiLend’s Monthly Trading Commentary across 2023.
Who We Are
EquiLend is a global financial technology firm offering Trading, Post-Trade, Data & Analytics, RegTech and Platform Solutions for the securities finance industry. EquiLend has offices in North America, EMEA and Asia-Pacific and is regulated in jurisdictions around the globe. The company is Great Place to Work Certified™ in the U.S., UK, Ireland and India and was named Best Post-Trade Service Provider Globally, Best Market Data Provider Globally and awarded for its Diversity & Inclusion in the Securities Finance Times Industry Excellence Awards 2023.
