Scale meets scarcity in APAC’s record securities lending market
01 September 2026
Matt Chessum, executive director, equity and analytic products at S&P Global Market Intelligence, explores Asia Pacific’s equities market performance in 2026
Image: Shutterstock
Asia Pacific equity lending has moved decisively higher in 2026, with expanding market values, deeper lendable inventories, and stronger borrower demand combining to lift balances and revenues to record highs.
S&P Global Market Intelligence data shows that this is not simply a valuation story. Supply has increased substantially, but balances on loan and utilisation have also advanced, while average fees have strengthened. That combination indicates that demand has absorbed the additional inventory and, in several markets, increased the value earned from each dollar of stock loaned.
The scale of the change is clear in the regional aggregates. Average APAC equity balances reached US$399 billion in July, 52 per cent above July 2025. Average lendable assets rose 37 per cent to US$4.635 trillion, while utilisation increased 18 per cent to 6.1 per cent. Because balances grew faster than lendable supply, the market became more productive despite the larger inventory available to borrowers.
Average fees climbed 23 per cent to 1.70 per cent, adding a pricing tailwind to the volume effect. Consequently, July revenue reached a record US$584 million, an 88 per cent year-on-year (YoY) increase. First-half revenue was US$2.443 billion, almost 80 per cent above the corresponding 2025 period.
Several forces sit behind this expansion. Higher equity valuations increased the dollar value of both lendable portfolios and positions on loan. Institutional asset growth broadened the supply available to lending programmes. At the same time, the rise in utilisation shows that borrowing demand was not diluted by that extra supply. Elevated fees suggest that demand remained concentrated in securities where availability was comparatively constrained.
The specials data adds further context to this growth story. Year-to-date APAC special balances (transactions greater than 500 basis points) increased 71 per cent YoY to US$35.4 billion in July, the highest level ever seen and almost three times the level recorded in 2024. That expansion points to a much broader base of hard-to-borrow activity, with year-to-date special revenues now only 5 per cent lower than the full year specials revenue total seen in 2025 (2025 experienced the highest specials revenues ever reported for the region).
APAC equity special (Fee >500bps) revenue (USD)
The macro backdrop also mattered. APAC equities have entered the second half of 2026 with a stronger risk appetite after a volatile start to the year, as investors looked through earlier concerns around energy prices, geopolitics, and tariff uncertainty, and refocused on the global AI investment cycle. That rotation was particularly supportive for technology and export-led markets, where semiconductor supply chains, AI infrastructure spending and cross-border capital flows became important drivers of equity turnover, positioning and hedging demand.
In practical terms, the APAC region has benefited from three reinforcing drivers: a larger asset base, a greater proportion of that base being borrowed, and improved pricing. The region’s concentration in technology, semiconductor, and growth-oriented shares likely intensified security-specific demand, but the data for the region demonstrates the effect through higher balances, utilisation, and fees rather than identifying individual catalysts.
Across the region, there have been three countries that have stood out as the main drivers of activity across the region in 2026: Hong Kong, Taiwan, and South Korea.
Hong Kong was the largest July revenue contributor across APAC markets. Revenue reached US$205 million, up 118 per cent YoY. Average balances expanded 68 per cent to US$85.1 billion, while the average fee increased 30 per cent to 2.81 per cent. Utilisation rose 66 per cent to 10.1 per cent. This is a particularly powerful mix: supply grew only 2 per cent to approximately US$700 billion during July, yet balances and utilisation rose sharply.
The mismatch suggests that borrowing demand accelerated much faster than available inventory, helping fees and revenue move higher. That pattern is consistent with the broader revival in Hong Kong market activity through 2026. Stronger cash-market turnover, renewed IPO momentum, increased Stock Connect flows, and sustained interest in technology and AI-linked shares all helped lift trading activity and create more opportunities for directional positioning, hedging, and relative-value strategies.
In that environment, securities lending demand was not just a by-product of higher prices; it was connected to a more active equity market in which investors were re-engaging with Hong Kong as a capital-raising and trading venue. Hong Kong’s first-half revenue more than doubled, while first-half balances increased 109 per cent, showing that July’s strength followed a sustained build-up rather than a single isolated spike.
Taiwan produced the fastest July revenue growth of all three countries. Revenue surged 185 per cent to US$187 million, supported by a 74 per cent increase in average balances to US$53.4 billion. Average fees reached 4.08 per cent, rising 63 per cent and standing well above the regional average. Lendable supply nearly doubled, increasing 98 per cent to roughly US$595 billion, while utilisation held at 6.8 per cent. Stable utilisation alongside a near-doubling of supply is significant: it means borrowing demand expanded broadly enough to absorb the additional inventory.
Taiwan therefore combined scale and scarcity. More assets became available and more were borrowed, while high fees indicate continued demand for harder-to-borrow names. The economic context is central to this performance. Taiwan’s equity market has been one of the clearest beneficiaries of the global AI and semiconductor cycle, with investor attention concentrated around advanced chip manufacturing, high-performance computing, and the broader supply chain that supports global data centre investment. That has lifted market values, but it has also increased concentration risk and volatility around a relatively small group of strategically important companies.
For securities lending, this creates a natural link between macro narrative and borrowing demand: strong long-only inflows increase lendable assets, while valuation sensitivity, earnings concentration and hedging needs can support persistent demand to borrow selected names. First-half revenue increased 76 per cent, with balances up 59 per cent, confirming a strong underlying trend.
South Korea presents a different but equally important profile. July revenue rose 42 per cent to US$94 million and balances increased 60 per cent to US$48.4 billion. However, average fees declined 11 per cent to 2.25 per cent, while utilisation fell 41 per cent to 4.1 per cent. Lendable supply increased 148 per cent to approximately US$514 billion, substantially outpacing balances. The rapid supply expansion reduced utilisation and softened pricing, limiting July revenue growth relative to Taiwan and Hong Kong. Even so, South Korea’s first-half performance was exceptional: revenue increased 187 per cent and balances climbed 152 per cent, while the first-half average fee rose 34 per cent. This divergence reflects the wider market story.
Korean equities have been supported by the AI memory cycle, semiconductor export strength, and policy efforts to reduce the long-standing Korea discount through improved governance and shareholder returns. Those themes attracted capital and increased portfolio values, expanding lendable supply. At the same time, the speed of the rally, the concentration of market leadership in large chipmakers, and episodes of elevated volatility created demand for hedging and short exposure. July therefore looks less like weak demand than a market adjusting to a much larger pool of lendable assets after an exceptionally strong first-half expansion.
The broader region reinforces the same theme. Japan remained the largest market by balances, with July balances of US$160.6 billion, up 30 per cent, and lendable assets of about US$1.919 trillion. Revenue increased a modest 7 per cent to US$73 million because fees fell 18 per cent to 0.53 per cent. Australia recorded 52 per cent revenue growth as balances more than doubled to US$44.0 billion, although fees declined 25 per cent.
The outlook for APAC securities lending is therefore defined by both scale and efficiency. Lendable supply has expanded rapidly, creating greater capacity for institutional lenders, but revenue growth has been strongest where demand has matched or exceeded that expansion.
Hong Kong demonstrates the impact of tight supply and rising utilisation; Taiwan shows how a larger inventory can coexist with high fees and exceptional revenue; South Korea illustrates how rapid supply growth can temporarily pressure utilisation while still supporting far larger balances.
Together, these markets show an APAC ecosystem becoming deeper, more valuable, and increasingly central to global securities finance markets.
S&P Global Market Intelligence data shows that this is not simply a valuation story. Supply has increased substantially, but balances on loan and utilisation have also advanced, while average fees have strengthened. That combination indicates that demand has absorbed the additional inventory and, in several markets, increased the value earned from each dollar of stock loaned.
The scale of the change is clear in the regional aggregates. Average APAC equity balances reached US$399 billion in July, 52 per cent above July 2025. Average lendable assets rose 37 per cent to US$4.635 trillion, while utilisation increased 18 per cent to 6.1 per cent. Because balances grew faster than lendable supply, the market became more productive despite the larger inventory available to borrowers.
Average fees climbed 23 per cent to 1.70 per cent, adding a pricing tailwind to the volume effect. Consequently, July revenue reached a record US$584 million, an 88 per cent year-on-year (YoY) increase. First-half revenue was US$2.443 billion, almost 80 per cent above the corresponding 2025 period.
Several forces sit behind this expansion. Higher equity valuations increased the dollar value of both lendable portfolios and positions on loan. Institutional asset growth broadened the supply available to lending programmes. At the same time, the rise in utilisation shows that borrowing demand was not diluted by that extra supply. Elevated fees suggest that demand remained concentrated in securities where availability was comparatively constrained.
The specials data adds further context to this growth story. Year-to-date APAC special balances (transactions greater than 500 basis points) increased 71 per cent YoY to US$35.4 billion in July, the highest level ever seen and almost three times the level recorded in 2024. That expansion points to a much broader base of hard-to-borrow activity, with year-to-date special revenues now only 5 per cent lower than the full year specials revenue total seen in 2025 (2025 experienced the highest specials revenues ever reported for the region).
APAC equity special (Fee >500bps) revenue (USD)
The macro backdrop also mattered. APAC equities have entered the second half of 2026 with a stronger risk appetite after a volatile start to the year, as investors looked through earlier concerns around energy prices, geopolitics, and tariff uncertainty, and refocused on the global AI investment cycle. That rotation was particularly supportive for technology and export-led markets, where semiconductor supply chains, AI infrastructure spending and cross-border capital flows became important drivers of equity turnover, positioning and hedging demand.
In practical terms, the APAC region has benefited from three reinforcing drivers: a larger asset base, a greater proportion of that base being borrowed, and improved pricing. The region’s concentration in technology, semiconductor, and growth-oriented shares likely intensified security-specific demand, but the data for the region demonstrates the effect through higher balances, utilisation, and fees rather than identifying individual catalysts.
Across the region, there have been three countries that have stood out as the main drivers of activity across the region in 2026: Hong Kong, Taiwan, and South Korea.
Hong Kong was the largest July revenue contributor across APAC markets. Revenue reached US$205 million, up 118 per cent YoY. Average balances expanded 68 per cent to US$85.1 billion, while the average fee increased 30 per cent to 2.81 per cent. Utilisation rose 66 per cent to 10.1 per cent. This is a particularly powerful mix: supply grew only 2 per cent to approximately US$700 billion during July, yet balances and utilisation rose sharply.
The mismatch suggests that borrowing demand accelerated much faster than available inventory, helping fees and revenue move higher. That pattern is consistent with the broader revival in Hong Kong market activity through 2026. Stronger cash-market turnover, renewed IPO momentum, increased Stock Connect flows, and sustained interest in technology and AI-linked shares all helped lift trading activity and create more opportunities for directional positioning, hedging, and relative-value strategies.
In that environment, securities lending demand was not just a by-product of higher prices; it was connected to a more active equity market in which investors were re-engaging with Hong Kong as a capital-raising and trading venue. Hong Kong’s first-half revenue more than doubled, while first-half balances increased 109 per cent, showing that July’s strength followed a sustained build-up rather than a single isolated spike.
Taiwan produced the fastest July revenue growth of all three countries. Revenue surged 185 per cent to US$187 million, supported by a 74 per cent increase in average balances to US$53.4 billion. Average fees reached 4.08 per cent, rising 63 per cent and standing well above the regional average. Lendable supply nearly doubled, increasing 98 per cent to roughly US$595 billion, while utilisation held at 6.8 per cent. Stable utilisation alongside a near-doubling of supply is significant: it means borrowing demand expanded broadly enough to absorb the additional inventory.
Taiwan therefore combined scale and scarcity. More assets became available and more were borrowed, while high fees indicate continued demand for harder-to-borrow names. The economic context is central to this performance. Taiwan’s equity market has been one of the clearest beneficiaries of the global AI and semiconductor cycle, with investor attention concentrated around advanced chip manufacturing, high-performance computing, and the broader supply chain that supports global data centre investment. That has lifted market values, but it has also increased concentration risk and volatility around a relatively small group of strategically important companies.
For securities lending, this creates a natural link between macro narrative and borrowing demand: strong long-only inflows increase lendable assets, while valuation sensitivity, earnings concentration and hedging needs can support persistent demand to borrow selected names. First-half revenue increased 76 per cent, with balances up 59 per cent, confirming a strong underlying trend.
South Korea presents a different but equally important profile. July revenue rose 42 per cent to US$94 million and balances increased 60 per cent to US$48.4 billion. However, average fees declined 11 per cent to 2.25 per cent, while utilisation fell 41 per cent to 4.1 per cent. Lendable supply increased 148 per cent to approximately US$514 billion, substantially outpacing balances. The rapid supply expansion reduced utilisation and softened pricing, limiting July revenue growth relative to Taiwan and Hong Kong. Even so, South Korea’s first-half performance was exceptional: revenue increased 187 per cent and balances climbed 152 per cent, while the first-half average fee rose 34 per cent. This divergence reflects the wider market story.
Korean equities have been supported by the AI memory cycle, semiconductor export strength, and policy efforts to reduce the long-standing Korea discount through improved governance and shareholder returns. Those themes attracted capital and increased portfolio values, expanding lendable supply. At the same time, the speed of the rally, the concentration of market leadership in large chipmakers, and episodes of elevated volatility created demand for hedging and short exposure. July therefore looks less like weak demand than a market adjusting to a much larger pool of lendable assets after an exceptionally strong first-half expansion.
The broader region reinforces the same theme. Japan remained the largest market by balances, with July balances of US$160.6 billion, up 30 per cent, and lendable assets of about US$1.919 trillion. Revenue increased a modest 7 per cent to US$73 million because fees fell 18 per cent to 0.53 per cent. Australia recorded 52 per cent revenue growth as balances more than doubled to US$44.0 billion, although fees declined 25 per cent.
The outlook for APAC securities lending is therefore defined by both scale and efficiency. Lendable supply has expanded rapidly, creating greater capacity for institutional lenders, but revenue growth has been strongest where demand has matched or exceeded that expansion.
Hong Kong demonstrates the impact of tight supply and rising utilisation; Taiwan shows how a larger inventory can coexist with high fees and exceptional revenue; South Korea illustrates how rapid supply growth can temporarily pressure utilisation while still supporting far larger balances.
Together, these markets show an APAC ecosystem becoming deeper, more valuable, and increasingly central to global securities finance markets.
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities AVÀÇ Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities AVÀÇ Times
