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MarketAxess' Enhanced Workflow Solution to Aid Private Banks

Zacks Equity Research
·3 min read

MarketAxess Holdings Inc.’s MKTX recently announced that its order and execution workflow solution, Axess IQ, has gone live for Banque de Luxembourg. The workflow solution has been designed per the improved liquidity and enhanced order execution needs of wealth management and private banking community.

Notably, Banque de Luxembourg is a renowned private banker, which also serves as a wealth management group. It is to be noted that this is not the first time that Axess IQ has been integrated into the workflow of a private bank and wealth management firm.

Case in point, Julius Baer, which is yet another private banking group, commenced operations utilizing Axess IQ in November last year, which can be referred to as the pilot launch of this solution.

After the pilot launch, Axess IQ was upgraded with additional features in a bid to boost its trading capabilities. Firstly, the Auto-X automated trading solution of MarketAxess is integrated into the Axess IQ workflow. In fact, inclusion of this solution has paved the way for fully-automated execution of orders, which is likely to bolster the company’s trading volumes in the coming quarters. Notably, in the second quarter of 2020, automated trading volumes of MarketAxess witnessed a surge of 66% from the previous year.

Secondly, the workflow solution is driven by AI-powered Composite+ pricing engine, which supplies high-quality market data. Hence, integration of Auto-X and Composite+ within Axess IQ has not only provided a boost to trading volumes but also ensured smooth functioning of order management workflow.

Apart from getting the opportunity to avail the benefits of Auto-X and Composite+, Axess IQ clients also get access to the all-to-all Open Trading marketplace. This marketplace, on an average, had 32,000 orders and more than $18 billion in notional value available per day for trading in the second quarter. Notably, Open Trading offers a varied pool of expanded liquidity opportunities for private banks, as it boasts of a global network of more than 1,700 active institutional investor and dealer firms.

Shares of MarketAxess have gained 45.3% in the past year against the industry’s decline of 1%.

The price performance looks impressive when compared with its peers, namely Nasdaq, Inc. NDAQ, CME Group Inc. CME and Intercontinental Exchange, Inc. ICE. While shares of Nasdaq and Intercontinental Exchange have rallied 26.2% and and 9.7% in a year, shares of CME Group have lost 20.1% in the same time frame.

Needless to say, Axess IQ will fetch more clients for the company, attributable to the solution’s enhanced features driving improved workflow processes. Enhanced solution will not only result in strengthening of the company’s existing capabilities but also boost trading volumes for MarketAxess as well.

The company, which carries a Zacks Rank #4 (Sell), has been witnessing consistent rise in trading volumes, with the month of August being no exception to the trend. Case in point, MarketAxess witnessed total monthly trading volume of $450 billion last month, which reflected a whopping improvement of 160.4% year over year. It also reported average daily volume (ADV) of $21.5 billion, which increased a massive 172.2% year over year. The upside can primarily be attributed to robust volumes across the company’s product lines.

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