Use the Securities Lending Dashboard to analyze short sale metrics for these and other stocks.
Recent shifting sands in Silicon Valley have had global impact. Data from Orbisa, securities lending data curated for the buy-side, shows how the story unfolded.
THE SVB SELL OFF
The collapse of Silicon Valley Bank (SVB) triggered a series of events in the financial markets that impacted regional banks on a national level. Trading of shares in a number of banks was halted due to volatility that saw the price of many of these banks drop by 60% or more. Naturally, these events have had a direct impact on the securities lending marketplace which we have seen reflected in Orbisa data.
Looking at a composite list of regional bank stocks derived from the SPDR® S&P® Regional Banking ETF (KRE), the group’s utilization jumped from below 4% to almost 5.5% as of March 13. The cost of borrow also increased as it became evident that some of these banks were perhaps on investors’ radar in early January. Using January 2 as a baseline, when these securities were largely trading GC (non-special), Orbisa is able to track the change in borrow rates. By mid-January the average borrowing rate across these regional banks had risen by 175%. In mid-February the average cost to borrow increased by more than 200% relative to the January 1 baseline. Now borrowing demand is at an all-time high for the year.
Looking into the KRE ETF, below are the banks that experienced the biggest increases in utilization year-to-date. These banks also experienced increases in Short Interest Indicators and borrowing rates.
As the ripple effects of Silicon Valley continue, stay tuned to Orbisa for additional insights and analysis of related securities lending data.
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Originally Published March 16, 2023 – SVB FINANCIAL (SIVB) AND THE IMPACT ON SECURITIES LENDING
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