MarketAxess Announces First Portfolio Trade for Tax-Exempt Municipal Bonds
MarketAxess (Nasdaq: MKTX), a premier electronic trading platform for fixed-income securities, has introduced its first portfolio trade tool for tax-exempt municipal bonds. This tool enables clients to bundle and trade up to 1,500 CUSIPs efficiently and discreetly. The tool allows for price negotiation and quick adjustments in portfolio metrics, providing better execution certainty. The tool addresses a major demand among municipal bond traders, aligning their trading capabilities with those in the corporate bond market. MarketAxess has seen considerable growth, capturing an 8.1% market share in municipal bonds, up from 5.6% the previous year, with $577 million in average daily volumes.
- MarketAxess has launched a new portfolio trading tool for tax-exempt municipal bonds, enhancing trading efficiency and execution certainty.
- The tool allows for trading up to 1,500 CUSIPs in a single transaction, which is highly demanded by muni traders.
- Clients can negotiate prices and adjust portfolio metrics quickly and discreetly, offering a significant operational advantage.
- MarketAxess' municipal bond market share has increased to 8.1%, from 5.6% the previous year, indicating strong market growth.
- The average daily trading volume on MarketAxess for municipal bonds stands at $577 million, showcasing high activity.
- No specific negative financial data or events impacting the company's stock performance were mentioned in the press release.
Insights
The introduction of a portfolio trading tool for tax-exempt municipal bonds by MarketAxess is a significant development in the fixed-income market. In essence, this tool streamlines the trading process by allowing clients to negotiate prices and execute trades on a diversified basket of up to 1,500 unique bonds in a single transaction. This can lead to improved efficiency and potentially better price execution, particularly in a market that has traditionally been less liquid compared to corporate bonds.
Short-term implications include enhanced trading efficiency and competitive pricing, which could attract more institutional investors to MarketAxess' platform. The increase in trading activity might also contribute to higher revenues for MarketAxess, given that their market share has grown to 8.1% from 5.6% over the past year.
Long-term implications could be even more transformative. With the ability to trade large portfolios efficiently, MarketAxess could solidify its position as a leading electronic trading platform for municipal bonds. This might lead to further innovations and tools that could entice more participants and increase overall market liquidity. However, the success of this tool will depend on the user experience and the actual execution quality it delivers over time.
From a financial perspective, the launch of the portfolio trading tool for tax-exempt municipal bonds by MarketAxess is a promising development that could impact the company's financial performance positively. The ability to handle up to 1,500 CUSIPs in a single transaction is a substantial upgrade, making the trading process more attractive to large institutional investors who require efficient and discreet execution.
The immediate financial benefits include the potential for increased trading volumes, which was already indicated by the rise in MarketAxess' municipal bond market share to 8.1% from 5.6%. Higher trading volumes can lead to increased transaction fees and, consequently, higher revenue. Moreover, the new tool may provide a competitive edge over other trading platforms, potentially attracting new clients and retaining existing ones.
However, the drawbacks might include the initial costs tied to the development and implementation of this tool, as well as ongoing maintenance and upgrades. Additionally, there is always a risk that the new tool may not deliver the expected performance improvements, which could affect client retention and satisfaction.
New tool brings e-trading efficiency and certainty of execution to muni baskets of up to 1,500 CUSIPs
The new Portfolio Trading for Tax-Exempt Munis tool allows clients to send lists to multiple counter-parties or a single dealer, negotiating price improvements and trading discreetly on a diversified basket of Tax-Exempt Munis in one singular point of transaction. Clients can load portfolio trades manually or utilize straight-through-processing via their OMS. Once loaded, clients can see instantly the changes in portfolio metrics, any impact on the portfolio’s overall market value and utilize MarketAxess’ technology to make split-second decisions on portfolio composition and pricing. During the portfolio negotiation process, clients also have the option to counter or remove individual line items for optimal execution.
Daniel Kelly, Head of Municipal Securities at MarketAxess, commented, “The portfolio trading tool was among the most requested enhancements to our Municipal bond franchise. Now muni traders can finally experience the same efficiency their counterparts in the corporate bond market have enjoyed for years—the flexibility to negotiate on individual line items without sacrificing certainty of execution for up to 1,500 unique CUSIPs in a single transaction.
With the launch of our automated execution suite of tools for munis last year and now, portfolio trading—we are proud to be delivering the innovation municipal market participants have asked for, and needed, to effectively scale their businesses,” he continued.
MarketAxess is one of the fastest growing electronic marketplaces for muni bonds. Last month, MarketAxess accounted for
For more information on MarketAxess muni solutions, visit: https://www.marketaxess.com/trade/municipal-bonds
About MarketAxess
MarketAxess (Nasdaq: MKTX) operates a leading electronic trading platform that delivers greater trading efficiency, a diversified pool of liquidity and significant cost savings to institutional investors and broker-dealers across the global fixed-income markets. Over 2,000 firms leverage MarketAxess’ patented technology to efficiently trade fixed-income securities. MarketAxess’ award-winning Open Trading® marketplace is widely regarded as the preferred all-to-all trading solution in the global credit markets. Founded in 2000, MarketAxess connects a robust network of market participants through an advanced full trading lifecycle solution that includes automated trading solutions, intelligent data and index products and a range of post-trade services. Learn more at www.marketaxess.com and on X @MarketAxess.
General Notes Regarding the Data Presented
Reported MarketAxess volume in all product categories includes only fully electronic trading volume. MarketAxess trading volumes and TRACE reported volumes are available on the Company’s website at investor.marketaxess.com/volume.
For periods beginning with January 2024, the Company has made changes to the market volume data used to calculate estimated market share for Municipal Bonds. The Company previously used estimates, derived from data issued by the Municipal Securities Rule Making Board (“MSRB”), including estimates for new issuance, commercial paper and variable-rate trading activity, and excluded these volumes from the estimated market volume data. While the Company still uses estimates, the new methodology for identifying and excluding these volumes from the market volume data is now based on MSRB “flags” to identify new issuance, commercial paper, and variable-rate volumes. The Company believes that the refined methodology used for Municipal Bonds provides more accurate measures of estimated market volumes and estimated market share. Prior comparable periods have been recast retrospectively for Municipal Bonds to conform to the updated presentation of the data. The new estimated market volume data is also available on the Company’s website at investor.marketaxess.com/volume.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240613690930/en/
INVESTOR RELATIONS
Stephen Davidson
MarketAxess Holdings Inc.
+1 212 813 6313
sdavidson2@marketaxess.com
MEDIA RELATIONS
Marisha Mistry
MarketAxess Holdings Inc.
+1 917 267 1232
mmistry@marketaxess.com
Source: MarketAxess Holdings Inc.
FAQ
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