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MarketAxess (MKTX) February Trading Suggests Decent Volumes

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Zacks Equity Research
·3 min read
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MarketAxess Holdings Inc. MKTX reported total monthly trading volume of $610.4 billion for February 2020, reflecting an improvement of 3.1% year over year. It also increased 6.1%, sequentially.

The company’s February volumes included $225.3 billion in credit volume and $385.1 billion in rates volume.

Its strong volumes for last month reflect its accelerating market share gains, robust credit market volumes and a global shift among dealers and investors toward fixed income trading automation.

For the same period, this operator of a leading electronic trading platform for fixed-income securities and a provider of market data and post-trade services reported a daily volume (ADV) of $11.7 billion, on average, which rose 18.6% year over year. This upside is driven by higher trading in U.S. high-grade bonds and other credit bonds.

MarketAxess is steadily growing its share of U.S. credit market by virtue of its Open Trading platform. Launched in 2012, MarketAxess Open Trading is an electronic all-to-all credit trading marketplace, enabling market participants to source liquidity from various sources. It now has a global network of more than 1,800 firms including the world’s leading asset managers and institutional broker-dealers. Open Trading delivers real cost savings by ramping up trading efficiencies and vastly expanding the liquidity pool for global credit trading. This means those investors can more easily find buyers or sellers at a moment's notice.

Notably, the large fixed income market is undergoing a major structural shift owing to regulatory and market trends. The company has the leading electronic trading network for the institutional market of U.S. credit products. Even though the electronic trading market share is widening, the same is in early stages of market penetration, which provides the company with ample opportunities to grow.

The company's fourth-quarter results gained from better corporate bond trading volumes. Total trading volumes expanded 30.7% year over year to $639.6 billion, driven by an increase in U.S. high grade and other credit trading volumes.

MarketAxess is also acquiring entities to expand its capabilities.
The company’s solid progress in core products, superior financial model, large and increasing addressable market, significant operating leverage and an expanded suite of electronic trading protocols poise it well for long-term growth.

Zacks Rank and Price Performance

In a year’s time, shares of this currently Zacks Rank #3 (Hold) company have gained 54.9% compared with its industry’s growth of 7.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other securities exchange companies in the same space include Intercontinental Exchange Inc. ICE, CME Group Inc. CME and Nasdaq, Inc. NDAQ. While CME Group has lost 7.6%, both Intercontinental Exchange and Nasdaq have rallied 13.4% and 20.9%, respectively.

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Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report

CME Group Inc. (CME) : Free Stock Analysis Report

Nasdaq, Inc. (NDAQ) : Free Stock Analysis Report

MarketAxess Holdings Inc. (MKTX) : Free Stock Analysis Report

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