DataLend gets into the market commentary space: we compare the three securities lending data providers and their write ups

EquiLend subsidiary DataLend has started its own market commentary based on its data. This is a game long played by Markit Data Explorers and SunGard ASTEC Analytics. In this post we take a look at what DataLend has written up, what Markit and SunGard are doing these days and what the implications might be for their respective services. We also ask, what is the value of these commentaries in the market?

The DataLend write up is on cell phone makers – Nokia, RIM and Apple are all featured. Straight-forward stuff, discussing the highs and lows of the stock along with the securities lending rates. The two interesting points that may differentiate this write up are the inclusion of corporate bond data – the author of the article is Oscar Heuttner, head of BondLend and a long time fixed income guy – and a paragraph on utilization. Utilization is a tough data point to discuss with integrity for any data provider that isn’t getting a full read of positions from its contributors. DataLend seems to think that its utilization data are valid and are ready to go live with them. The cell phone maker article is here.

By comparison, Markit is producing their quarterly reviews – here’s the latest – with a good general overview of each market. Will Duff Gordon has been writing these pieces for years and has a great way to spin a tail out of the available data points. The quarterly summary provides data by country, securities lending fees, supply and demand, the DX Long/Short ratio (which also requires information on utilization) and returns by group. There are also a number of advertisements from the agency lending groups of BNY Mellon, Deutsche Bank and RBC Investor Services – this publication is aimed at the beneficial owner crowd. Markit is still doing daily commentary as well – here’s one on car makers from a couple of days ago, but these are a lot drier than they used to be. The data incorporate more Markit-centric offerings like CDS spreads and don’t have Duff Gordon’s energy to them. The fellow on the accompanying video seems a lot more reserved as well.

Last by not least, SunGard continues to produce occasional analysis pieces on their web site and in places like Forbes. Andy Shinn used to write many of these pieces but now Karl Loomes and David Lewis seem to have taken over. Here’s a link to the SunGard Securities Finance commentary site. We have to admit, while the trading data are helpful, we find the most interesting part of this site to be David Lewis’s commentary on the state of securities finance, not unlike what we write about here. The SunGard articles are less revealing of the underlying data then what DataLend and Market Data Explorers produce. They do get similar plugs as Markit in the press though, for example a quote on Herbalife in a recent New York Times article.

So what to make of all this? The initial write up by DataLend was data centric and this is their first time out of the gate, so we weren’t expecting a deep story. Will Duff Gordon had this down cold at Data Explorers but he seems to have moved on from the daily commentary role. SunGard isn’t doing much daily commentary that they make public, but David Lewis (and Daniel Parker) publish occasional commentary that is really worth reading.

More to the point though, why write these commentaries to begin with? This is marketing work, aimed at convincing the public that the securities lending data are sound and believable. Markit wants to tie its securities lending data in with its other products like CDS. SunGard wants to be the thought leader across securities finance, hence the more thought-provoking pieces that speak towards regulation and SunGard’s myriad data products. And DataLend wants to say that it has arrived. Our take: readers shouldn’t expect a lot from the write ups that feature securities lending data. While interesting, their real job is to point the reader towards making that important phone call to try the product out.

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