APAC Securities lending review 2025

APAC 2025 – Positioning for the Next Phase of Asian Growth

2025 marked a pivotal year for the Asia-Pacific region as a renewed wave of trade restrictions, spearheaded by higher U.S. tariffs on strategically sensitive imports, introduced fresh uncertainty across Asia-Pacific’s export-driven economies. Markets throughout North and Southeast Asia experienced increased price volatility as investors reassessed earnings prospects in light of fluctuating global trade volumes. In response, corporates accelerated the reconfiguration of supply chains within Asia, diverting capital investment toward alternative production hubs across ASEAN, highlighting the region’s adaptability amid shifting trade dynamics.

The technology sector remained a focal point, with demand for artificial intelligence and advanced computing fueling growth in segments of the regional tech industry. However, heightened sensitivity to policy risks and valuations led to periodic corrections in tech-heavy markets, underscoring the sector’s susceptibility to external shocks. Overall, the performance of Asia-Pacific’s technology and semiconductor sectors reinforced the region’s vital role in global innovation supply chains.

Japan continued its gradual shift away from ultra-low interest rates in 2025, as the central bank extended its move toward policy normalization. This transition lifted Japanese bond yields and had significant ripple effects on global fixed-income markets, given Japan’s status as a major overseas investor. The resulting adjustments in currency and risk-asset markets across Asia-Pacific reflected the changing landscape, as reduced Yen-based borrowing influenced capital flows throughout the region.

Equity markets across Asia delivered robust returns in 2025, buoyed by resilient domestic demand and selective optimism in technology and manufacturing. However, performance varied significantly by country. Markets driven by domestic growth outperformed those more exposed to global trade frictions and concerns over a Chinese slowdown. Elevated volatility prompted investors to adopt a more selective approach, favoring targeted sector and country allocations over broad regional exposure.

APAC 2025 Securities Lending – Insights and Trends

The Asia-Pacific region continued to act as a global growth engine for securities lending revenues in 2025, led by standout performances from Hong Kong and South Korea. APAC equity revenues soared by 54% year-over-year, contributing 22% of global securities lending revenues, with activity concentrated in a select group of high-impact markets. This surge was fueled by new listings, corporate actions, and country-specific positioning. Looking ahead, ongoing deal flow and event-driven catalysts are expected to keep Asian equity revenues elevated, driven primarily by a narrow set of “specials” rather than broad-based short demand.

Rising lendable supply and balances further supported revenue growth, with S&P reporting record or near-record levels of lendable inventory, surpassing $50 trillion globally at the start of 2026. This expansion was propelled by higher equity valuations and the growth of lending pools. The region’s elevated general collateral balances played a stabilizing role, reinforcing the strategic importance of Asian lending markets. If market valuations remain robust, balance-driven revenue support should persist, though future monetization will increasingly depend on inventory optimization rather than balance growth alone.

Fee dynamics across Asia were notably volatile and highly event-sensitive throughout 2025. Average fees compressed during quieter market periods but surged during episodes of heightened utilization or stock-specific demand. S&P data revealed significant dispersion in pricing, with select Asian markets recording substantially higher fees during short, intense demand cycles. Going forward, fee outcomes are likely to remain uneven, favoring lenders who can respond swiftly to discrete events rather than relying on sustained, market-wide tightness.

ETFs and depositary instruments gained strategic importance in 2025, with strong and persistent growth reflected in our securities finance snapshots. These instruments are increasingly used for tactical and thematic exposure to Asian markets, with revenues, balances, and fees for listed vehicles expanding faster than many single-stock segments. Their liquidity and flexibility position ETFs and depositary instruments as a structural source of demand, and they are expected to play an even larger role in driving Asian securities lending revenues in the years ahead.

To see full details of the securities lending activity that took place in each of the individual APAC markets throughout 2025, please download our full report, Securities Finance APAC Review 2025.