MarketAxess Announces Monthly Volume Statistics for December 2022

Rhea-AI Summary

MarketAxess Holdings Inc. (Nasdaq: MKTX) reported significant growth in December 2022, with total credit average daily volume (ADV) rising 27% to $10.6 billion. Key metrics include a record 22.8% market share for composite corporate bonds and a 26% increase in U.S. high-grade ADV. Estimated price improvements reached approximately $79 million, contributing to a total of $946 million for 2022, a 65% year-on-year increase. The company anticipates a favorable operating environment for fixed income in 2023 due to strong franchise performance and strategic investments.

Positive

• 27% increase in total credit ADV to $10.6 billion in December 2022.
• Record 22.8% composite corporate bond market share, up from 21.4%.
• 26% increase in U.S. high-grade ADV to $5.1 billion.
• Estimated price improvement for 2022 at approximately $946 million, 65% above prior year.
• 38% of total credit trading via Open Trading, up from 36%.

Negative

• Emerging markets ADV decreased by 22%, reflecting market volume challenges.

NEW YORK--(BUSINESS WIRE)-- MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced monthly trading volume for December 2022 and preliminary variable transaction fees per million (“FPM”) for the month of December and the quarter ended December 31, 2022.¹

Chris Concannon, President and COO of MarketAxess commented: “We delivered another strong month with a 27% increase in total credit ADV, driven by a 26% increase in U.S. high-grade ADV and record estimated market share across high-yield, emerging markets, Eurobonds and municipals. These market share gains reflect the powerful benefits of our unique all-to-all liquidity pool.  

Open Trading estimated price improvement⁴ was approximately $79 million in December and average estimated price improvement per million was approximately $1,042. For full-year 2022, estimated price improvement was approximately $946 million, 65% above the prior year.

The strong share gains we delivered this year reflect the increasing strength of our franchise, driven by the investments we have made to expand our product and geographic foundation. We believe that these strong results and the favorable backdrop for fixed income markets in 2023 create a very attractive operating environment for our model in the new year.” 

Select December 2022 highlights*

• Strong December with 27% increase in total credit average daily volume (“ADV”) to $10.6 billion.
• Record 22.8% (+140 bps) composite corporate bond estimated market share,² up from 21.4%.
• 26% increase in U.S. high-grade ADV to $5.1 billion with estimated market share of 23.4%. Estimated U.S. high-grade TRACE market ADV increased 27%.
• 25% increase in U.S. high-yield ADV to $1.6 billion with record estimated market share of 21.4% (+310 bps), up from 18.3%.
• Emerging markets ADV of $2.1 billion, down slightly; flat excluding the impact of foreign currency fluctuations. Emerging markets market volumes down 22%. Record 32.9% estimated market share of FINRA TRACE-reportable emerging markets trading volume.³
• Record 19.6% (+520 bps) estimated Eurobonds market share, up from 14.4%. $1.4 billion in Eurobonds ADV, representing an increase of 56%; up approximately 63% excluding the impact of foreign currency fluctuations.
• $473 million in municipal bond ADV with record estimated market share of 5.5% (+330 bps).
• 38% of total credit trading volume was executed via Open Trading®, up from 36%. Estimated price improvement⁴ via Open Trading was approximately $79 million, and average estimated price improvement per million was $1,042.
• The preliminary FPM for total credit for December was $165, compared to $163 in November. The increase in U.S. high-grade average fees per million in December, driven in part by an increase in duration during the month, was partially offset by lower average fees per million in other credit products due to product mix.¹

*All comparisons versus December 2021 unless otherwise noted.

Table 1: December 2022 trading ADV

					CREDIT																					RATES
$ in millions (unaudited)	US/UK Trading Days5	Total ADV			Total Credit			High-Grade			High-Yield			Emerging Markets			Eurobonds			Municipal Bonds			Total Rates			US Govt. Bonds			Agcy./Other Govt. Bonds
Dec-22	21/20	$	27,191		$	10,613		$	5,069		$	1,557		$	2,148		$	1,350		$	473		$	16,578		$	16,235		$	343
Dec-21	22/21	$	24,505		$	8,386		$	4,024		$	1,248		$	2,151		$	867		$	83		$	16,119		$	15,882		$	237
% Change			11	%		27	%		26	%		25	%		(0	%)		56	%		470	%		3	%		2	%		45	%

Table 1A: December 2022 estimated market share

	CREDIT												RATES
(unaudited)	High-Grade		High-Yield		High-Grade/High- Yield Combined		Eurobonds		Composite Corporate Bond2		Municipals		US Govt. Bonds
Dec-22	23.4	%	21.4	%	22.9	%	19.6	%	22.8	%	5.5	%	3.1	%
Dec-21	23.6	%	18.3	%	22.1	%	14.4	%	21.4	%	2.2	%	2.8	%
Bps Change	(20) bps		+310 bps		+80 bps		+520 bps		+140 bps		+330 bps		+30 bps

Table 1B: 4Q22 trading ADV

					CREDIT																					RATES
$ in millions (unaudited)	US/UK Trading Days5	Total ADV			Total Credit			High-Grade			High-Yield			Emerging Markets			Eurobonds			Municipal Bonds			Total Rates			US Govt. Bonds			Agcy./Other Govt. Bonds
4Q22	61/63	$	30,424		$	12,042		$	5,487		$	1,805		$	2,666		$	1,569		$	500		$	18,382		$	18,026		$	356
4Q21	62/64	$	29,158		$	9,711		$	4,482		$	1,355		$	2,590		$	1,169		$	107		$	19,447		$	19,087		$	360
% Change			4	%		24	%		22	%		33	%		3	%		34	%		367	%		(5	%)		(6	%)		(1	%)

Table 1C: 4Q22 estimated market share

	CREDIT												RATES
(unaudited)	High-Grade		High-Yield		High-Grade/High- Yield Combined		Eurobonds		Composite Corporate Bond2		Municipals		US Govt. Bonds
4Q22	21.1	%	20.5	%	20.9	%	18.2	%	20.9	%	5.0	%	3.1	%
4Q21	21.2	%	15.5	%	19.5	%	13.2	%	18.8	%	2.4	%	2.9	%
Bps Change	(10) bps		+500 bps		+140 bps		+500 bps		+210 bps		+260 bps		+20 bps

Select 4Q22 highlights**

• 24% increase in total credit ADV to $12.0 billion.
• Record 20.9% (+210 bps) composite corporate bond estimated market share,² up from 18.8%.
• 22% increase in U.S. high-grade ADV to $5.5 billion with estimated market share of 21.1%. Estimated U.S. high-grade TRACE market ADV increased 23%.
• Record U.S. high-yield estimated market share of 20.5% (+500 bps), up from 15.5%, on ADV of $1.8 billion, representing an increase of 33%.
• Emerging markets ADV of $2.7 billion, up 3%; up approximately 5% excluding the impact of foreign currency fluctuations. Emerging markets market volumes down 22%. Record 31.5% estimated market share of FINRA TRACE-reportable emerging markets trading volume.³
• Record 18.2% (+500 bps) Eurobonds estimated market share, up from 13.2% on record ADV of $1.6 billion, representing an increase of 34%; up approximately 49% excluding the impact of foreign currency fluctuations.
• Record 5.0% (+260 bps) municipal bond estimated market share on record ADV of $500 million.
• Record 38% of total credit trading volume was executed via Open Trading, up from 36% in the prior year. Estimated price improvement⁴ via Open Trading was approximately $246 million, and average estimated price improvement per million was $988.
• Record $31 billion in portfolio trading volume, up from $13 billion in 4Q21, and $25 billion in 3Q22.
• 3.1% (+20 bps) U.S. Treasury estimated market share, up from 2.9%.
• The preliminary FPM for total credit for the quarter was $164.0, compared to $165.6 in 3Q22. The preliminary FPM for total rates for the quarter was $4.10.¹

**All comparisons versus 4Q21 unless otherwise noted.

¹ The FPM for total credit and total rates for the month of December and quarter ended December 31, 2022 are preliminary and may be revised in subsequent updates and public filings. The Company undertakes no obligation to update any fee information in future press releases.

² Composite corporate bond estimated market share is defined as combined estimated market share across U.S. high-grade (derived from FINRA TRACE reported data), U.S. high-yield (derived from FINRA TRACE reported data), emerging markets (derived from FINRA TRACE-reportable emerging markets volume, principally U.S. dollar denominated corporates) and Eurobonds (derived from MarketAxess TRAX data which is currently estimated to represent approximately 70% of the total European market) product areas.

³ Emerging markets estimated market share calculated using FINRA TRACE-reportable emerging markets trading volume, principally U.S. dollar denominated corporates.

⁴ Estimated price improvement consists of estimated liquidity taker price improvement (defined as the difference between the winning price and the best disclosed dealer cover price) and estimated liquidity provider price improvement (defined as the difference between the winning price and then current Composite+ bid or offer level, offer if the provider is buying, bid if provider is selling) at the time of the inquiry.

⁵ The number of U.S. trading days is based on the SIFMA holiday recommendation calendar and the number of U.K. trading days is based primarily on the U.K. Bank holiday schedule.

Reported MarketAxess volume in all product categories includes only fully electronic trading volume. MarketAxess trading volumes, TRACE reported volumes and MarketAxess Post-Trade processed volumes are available on the Company’s website at investor.marketaxess.com/volume.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements, including statements about the outlook and prospects for Company and industry growth, as well as statements about the Company’s future financial and operating performance. These and other statements that relate to future results and events are based on MarketAxess’ current expectations. The Company’s actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including: global economic, political and market factors; risks relating to the COVID-19 pandemic, including the possible effects of the economic conditions worldwide resulting from the COVID-19 pandemic; adverse effects as a result of climate change or other ESG risks that could affect our reputation; the level of trading volume transacted on the MarketAxess platform; the rapidly evolving nature of the electronic financial services industry; the level and intensity of competition in the fixed-income electronic trading industry and the pricing pressures that may result; reputational or credibility risks related to our data products and index business; the variability of our growth rate; our ability to introduce new fee plans and our clients’ response; our ability to attract clients or adapt our technology and marketing strategy to new markets; risks related to our growing international operations; our dependence on our broker-dealer clients; the loss of any of our significant institutional investor clients; our exposure to risks resulting from non-performance by counterparties to transactions executed between our clients in which we act as an intermediary in matched principal trades; risks related to self-clearing; the effect of rapid market or technological changes on us and the users of our technology; our dependence on third-party suppliers for key products and services; our ability to successfully maintain the integrity of our trading platform and our response to system failures, capacity constraints and business interruptions; the occurrence of design defects, errors, failures or delays with our platforms; our vulnerability to cyber security risks; our actual or perceived failure to comply with privacy and data protection laws; our ability to protect our intellectual property rights or technology and defend against intellectual property infringement or other claims; our ability to enter into strategic alliances and to acquire other businesses and successfully integrate them with our business; our dependence on our management team and our ability to attract and retain talent; limitations on our flexibility because we operate in a highly regulated industry; the increasing government regulation of us and our clients; risks related to the U.K.’s exit from the European Union; our exposure to costs and penalties related to our extensive regulation; our risks of litigation and securities laws liability; our future capital needs and our ability to obtain capital when needed; limitations on our operating flexibility contained in our credit agreement; and other factors. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. More information about these and other factors affecting MarketAxess’ business and prospects is contained in MarketAxess’ periodic filings with the Securities and Exchange Commission and can be accessed at www.marketaxess.com.

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 1,900 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 the full trading lifecycle, including automated trading solutions, intelligent data products and a range of post-trade services. Learn more at www.marketaxess.com and on Twitter @MarketAxess.

Table 2: Trading Volume Detail
			Month Ended December 31,
In millions (unaudited)			2022								2021									% Change
			Volume				ADV				Volume					ADV				Volume				ADV
Credit
High-grade			$	106,454			$	5,069			$	88,523				$	4,024				20.3		%		26.0		%
High-yield				32,694				1,557				27,466					1,248				19.0				24.8
Emerging markets				45,101				2,148				47,324					2,151				(4.7	)			(0.1	)
Eurobonds				27,007				1,350				18,199					867				48.4				55.7
Other credit1				10,274				489				2,102					96				388.8				409.4
Total credit trading2				221,530				10,613				183,614					8,386				20.6				26.6
Rates
U.S. Government Bonds3				340,932				16,235				349,408					15,882				(2.4	)			2.2
Agency and other government bonds2				7,018				343				5,103					237				37.5				44.7
Total rates trading				347,950				16,578				354,511					16,119				(1.9	)			2.8
Total trading			$	569,480			$	27,191			$	538,125				$	24,505				5.8				11.0
Number of U.S. Trading Days4							21									22
Number of U.K. Trading Days5							20									21
			Quarter Ended December 31,
In millions (unaudited)			2022								2021									% Change
			Volume				ADV				Volume					ADV				Volume				ADV
Credit
High-grade			$	334,735			$	5,487			$	277,891				$	4,482				20.5		%		22.4		%
High-yield				110,091				1,805				84,004					1,355				31.1				33.2
Emerging markets				162,597				2,666				160,560					2,590				1.3				2.9
Eurobonds				98,853				1,569				74,817					1,169				32.1				34.2
Other credit1				31,404				515				7,131					115				340.4				347.8
Total credit trading2				737,680				12,042				604,403					9,711				22.1				24.0
Rates
U.S. Government Bonds3				1,099,596				18,026				1,183,410					19,087				(7.1	)			(5.6	)
Agency and other government bonds2				22,138				356				22,685					360				(2.4	)			(1.1	)
Total rates trading				1,121,734				18,382				1,206,095					19,447				(7.0	)			(5.5	)
Total trading			$	1,859,414			$	30,424			$	1,810,498				$	29,158				2.7				4.3
Number of U.S. Trading Days4							61									62
Number of U.K. Trading Days5							63									64

Table 2: Trading Volume Detail (continued)
			Year-to-Date Ended December 31,
In millions (unaudited)			2022								2021									% Change
			Volume				ADV				Volume					ADV				Volume				ADV
Credit
High-grade			$	1,364,530			$	5,480			$	1,243,180				$	4,973				9.8		%		10.2		%
High-yield				424,812				1,706				371,116					1,484				14.5				15.0
Emerging markets				693,560				2,785				649,455					2,598				6.8				7.2
Eurobonds				362,713				1,451				334,899					1,324				8.3				9.6
Other credit1				99,225				398				26,134					105				279.7				279.0
Total credit trading2				2,944,840				11,820				2,624,784					10,484				12.2				12.7
Rates
U.S. Government Bonds3				5,347,607				21,476				4,074,451					16,298				31.2				31.8
Agency and other government bonds2				96,782				388				70,513					281				37.3				38.1
Total rates trading				5,444,389				21,864				4,144,964					16,579				31.3				31.9
Total trading			$	8,389,229			$	33,684			$	6,769,748				$	27,063				23.9				24.5
Number of U.S. Trading Days4							249									250
Number of U.K. Trading Days5							250									253
1 Beginning January 2022, following the integration of the MuniBrokers platform, we are now including MuniBrokers variable commission related trading volume in other credit.
2 Consistent with FINRA TRACE reporting standards, both sides of trades are included in the Company's reported volumes when the Company executes trades on a matched principal basis between two counterparties.
3 Consistent with industry standards, U.S. Government Bond trades are single-counted.
4 The number of U.S. trading days is based on the SIFMA holiday recommendation calendar.
5 The number of U.K. trading days is based primarily on the U.K. Bank holiday schedule.

 

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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

William McBride

RF | Binder

+1 917 239 6726

Source: MarketAxess Holdings Inc.

FAQ

What was MarketAxess' trading volume in December 2022?

MarketAxess reported a total credit average daily volume (ADV) of $10.6 billion in December 2022.

What is MKTX's estimated market share for U.S. high-grade bonds?

In December 2022, MarketAxess achieved an estimated market share of 23.4% for U.S. high-grade bonds.

How much did MarketAxess estimate for price improvement in 2022?

MarketAxess estimated price improvement for 2022 at approximately $946 million, a 65% increase from the previous year.

What were the highlights of MarketAxess' Q4 2022 performance?

In Q4 2022, MarketAxess reported a 24% increase in total credit ADV to $12.0 billion and a record 20.9% composite corporate bond market share.

What challenges did MarketAxess face in the emerging markets segment?

MarketAxess experienced a 22% decrease in emerging markets ADV in December 2022.