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MarketAxess Partners Virtu for New Trading Tools and ETFs

Zacks Equity Research

MarketAxess Holdings, Inc. MKTX along with Virtu Financial, Inc. VIRT have  collaborated to offer organizations trading tools and an access to global exchange-traded funds (ETFs) and fixed income securities.

This deal, consisting of the Virtu’s streaming eNAV ETF fair value offering, is estimated to be launched in the third quarter of 2019. The unique tie-up will provide worldwide, multi-asset and multi-currency coverage to MarketAxess and Virtu RFQ-hub clients besides catering to known and anonymous ETF trading through a request-for-quote protocol. Moreover, it will render Virtu’s real-time eNAV, which is a streaming fair value tool for ETFs. This will also combine the advanced, real-time trade analytics of MarketAxess’ award-winning Composite+ (CP+) algorithmic pricing tool with Virtu’s wide suite of TCA (Transaction Cost Analytics) tools. It should be noted that ETFs have grown fast to become a chief component of the liquidity landscape in the global credit markets.

With this deal, MarketAxess will gain from penetrating the ETF trading space with Virtu, marking its enhanced success in Open Trading. The company will be able to deliver a new, affordable and safe solution to institutional investors. MarketAxess’ clients can use Virtu’s advanced ETF platform — RFQ-hub — and enjoy the convenient integration of RFQ-hub’s ETF trading and analytics services.  Moreover, RFQ-hub will in turn, use the company’s fixed income platform.

The combination of MarketAxess’s advanced fixed income platform and Virtu’s expertise plus knowledge in the global multi-asset class and ETFs would surely be beneficial to their clients.

MarketAxess always supplements its organic growth profile by entering into strategic alliances or by acquiring businesses or technologies, which further enables it to tap new markets and deliver new products or services. Some of its notable deals are — the acquisition of Xtrakter Limited that provided the company with an expanded set of technology solutions; a strategic alliance with BlackRock, Inc., which improved the range of trading connections available to global credit market participants and an agreement with S&P Dow Jones Indices to jointly develop indices that will track the most liquid segments of the U.S. corporate bond market. Additionally, we are impressed by the company’s inorganic growth story, which has aided top-line growth.

Shares of the Zacks Rank #3 (Hold) company have rallied 23.2% in a year’s time, outperforming its industry’s growth of 11.9%.

Stocks That Warrant a Look

Some better-ranked stocks from the same sector are Oaktree Specialty Lending Corporation OCSL and Euronet Worldwide, Inc. EEFT, each currently carrying a Zacks Rank #2 (Buy).

Oaktree Specialty is a business development company. It managed to come up with positive results in all the trailing four quarters, the average being 10.10%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Euronet Worldwide, Inc. offers payment and transaction processing plus distribution solutions to financial institutions, retailers, service providers and individual consumers worldwide. The company delivered average trailing four-quarter beat of 2.68%.

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Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report
 
Euronet Worldwide, Inc. (EEFT) : Free Stock Analysis Report
 
MarketAxess Holdings Inc. (MKTX) : Free Stock Analysis Report
 
Oaktree Specialty Lending Corp. (OCSL) : Free Stock Analysis Report
 
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