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Securities lending ‘to open up and go mainstream’ in 2019

Boaz Yaari, CEO and founder of Sharegain

Securities lending is set to ‘go mainstream’ in 2019 as market forces drive the market to become more accessible and transparent, a senior executive in the digital securities market has predicted.
“Change is coming,” said Boaz Yaari, CEO and founder of Sharegain. “Securities lending is is a $2.5tn secret that’s about to be opened up to every investor, from the world’s largest funds through to, eventually, even consumers.”
He says this development should be seen as highly positive with financial markets having endured their worst year in a decade: “It’s not all doom and gloom,” he said. “Whether you’re a global institution looking for alpha in a low-yield, high-cost environment, or a family office seeking a simple way to improve returns, securities lending is becoming an increasingly attractive option. Revenues have already returned to the highest levels in a decade – and we could see it explode into the mainstream as a go-to tactic among investors next year.”
Yaari pointed to the views of several market commentators who have predicted that the market for asset lending could ‘explode’ in 2019, as fund managers and banks seek new revenue streams amid rising costs and a global squeeze on profits.
He fully expects that figures at the year end will show that asset managers and banks made $10bn through securities lending, the practice of lending out stocks, bonds and ETFs in exchange for lending revenue, in 2018: “The first half of the year saw global money managers alone nearly generate $6billion in revenue by loaning out stocks and bonds, which was the best performance since before the financial crisis of 2008,” he added.

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