Securities lending specials revenues for US equities in Q3 2024 outpaced every other quarter of the year so far, reflecting heightened demand to borrow stocks across multiple sectors. Specials are defined as any loan with a fee greater than 500bps.
The robust borrowing activity, primarily concentrated in Media & Entertainment, Pharmaceuticals, Biotechnology & Life Sciences, Capital Goods, Automobiles & Components, and Energy, was fueled by a confluence of deal-making activity, rising equity valuations, geopolitical tensions, and an anticipated shift towards a more dovish monetary policy stance by the Federal Reserve.