MarketAxess Announces Monthly Volume Statistics for May 2024

Rhea-AI Summary

MarketAxess Holdings announced notable trading volume stats for May 2024. CEO Chris Concannon highlighted an 11.1% growth in total credit average daily volume (ADV), with significant increases in emerging markets (21.8%), Eurobonds (24.8%), and municipal bonds (43.2%). U.S. high-grade portfolio trading market share rose to 21.8%, a significant jump from 12.8% the previous year. Total ADV was up 13.5% to $32.2 billion, driven by a 15.2% increase in total rates trading ADV. However, U.S. high-yield ADV fell by 13.1%, with market share declining to 12.8%.

Notably, total portfolio trading volume surged 136.2%, with 55% executed on X-Pro. The preliminary variable transaction fees per million (FPM) for total credit decreased to $149, down from $164 the previous year, while total rates FPM dropped to $4.40.

Positive

• Total ADV increased by 13.5% to $32.2 billion.
• Total credit ADV grew by 11.1% to $13.4 billion.
• Emerging markets ADV rose by 21.8%.
• Eurobonds ADV up by 24.8%.
• Municipal bonds ADV surged by 43.2%.
• U.S. high-grade portfolio trading market share increased to 21.8%.
• Total rates trading ADV increased by 15.2%.
• Total portfolio trading volume up by 136.2%.
• Dealer RFQ ADV increased by 24.1%.

Negative

• U.S. high-yield ADV decreased by 13.1%.
• U.S. high-yield market share dropped to 12.8%.
• Variable transaction fees per million for total credit decreased to $149.
• Total rates FPM fell to $4.40.

Insights

Financial Analyst

MarketAxess Holdings Inc. has reported significant trading volume statistics for May 2024. The company's strong growth in total credit average daily volume (ADV) by 11.1% is notable. Particularly, increases in emerging markets, Eurobonds and municipal bonds reflect a diverse expansion. The rising figures in municipal bonds, up by 43.2%, showcase record market share growth from previous years.

However, a key observation is the decrease in U.S. high-yield market share, despite an increase in new issuance and market ADV. This discrepancy, partially attributed to lower credit spread volatility, indicates potential shifts in market dynamics and client behavior, which warrants close scrutiny.

Despite the positive trading volume trends, the preliminary variable transaction fees per million (FPM) for total credit have decreased to $149 from $164 in the prior year. This decrease in FPM might impact overall revenue unless offset by the substantial volume growth. It's important for investors to monitor how these fee dynamics affect the company's profitability in upcoming periods.

Market Research Analyst

MarketAxess' reported growth in multiple credit segments such as emerging markets and Eurobonds indicates robust market penetration and diversification. The shift in portfolio trading, especially the increase executed on X-Pro platform, suggests an enhanced client adoption of new trading technologies, which could lead to long-term client retention and market leadership.

The rise in portfolio trading volume by 136.2% demonstrates the growing importance of this trading method. Also, the firm's Open Trading share increase to 35% from 34% shows a marginal yet positive trend towards more transparent and decentralized trading mechanisms within the fixed-income market. However, it's important to watch how these advancements will sustain and integrate into the broader market environment, given the competitive pressures and evolving market mechanisms.

NEW YORK--(BUSINESS WIRE)-- MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, today announced trading volume and preliminary variable transaction fees per million (“FPM”) for May 2024.¹

Chris Concannon, CEO of MarketAxess, commented:

“In May, we delivered strong growth in total credit ADV of 11.1%, driven by a 21.8% increase in emerging markets, a 24.8% increase in Eurobonds and a 43.2% increase in municipal bonds on record municipal bond market share of 8.1%. Our estimated market share of U.S. high-grade portfolio trading was 21.8%, up from 12.8% in the prior year, and up from 15.4% in April, reflecting strong gains in portfolio trading. In May, approximately 55% of our portfolio trading volume was executed on X-Pro, as we continue the roll-out to our largest clients.”

Select May highlights*

• Total average daily volume (“ADV”) of $32.2 billion, up 13.5% on strong growth in total credit ADV to $13.4 billion, up 11.1%, and a 15.2% increase in total rates trading ADV.

U.S. Credit

• U.S. high-grade ADV of $6.1 billion, up 6.2% on a 15.2% increase in estimated market ADV. The strong increase in market volumes included a 35% increase in portfolio trading and dealer-to-dealer trading volume combined in May, which represented approximately 72% of the growth of the market year-over-year. Estimated market share was 18.6% (19.2% including single-dealer portfolio trades),² down from 20.2% (no impact from single-dealer portfolio trades).²
• U.S. high-yield ADV of $1.3 billion, down 13.1%, with estimated market share of 12.8% (13.1% including single-dealer portfolio trades),² down from 16.7% (16.8% including single-dealer portfolio trades).² U.S. high-yield estimated market ADV increased 13.2%. We believe the decrease in U.S. high-yield estimated market share year-over-year was driven, in part, by lower levels of credit spread volatility and a greater focus on the new issue calendar by our long-only client segment.
  • Lower levels of credit spread volatility drove an estimated 37.2% decrease in ETF market maker client activity on the platform in May compared to the prior year.
  • U.S. high-yield new issuance was $33.6 billion in May, up 51.5% from the prior year.

Other Credit

• Emerging markets ADV of $3.1 billion, up 21.8%. The year-over-year increase was due to a 13.2% increase in hard currency trading ADV and a 34.1% increase in local currency markets ADV.³
• Eurobonds ADV of $2.3 billion, up 24.8%.³
• Municipal bond ADV of $577 million, up 43.2%, with estimated market ADV down 1.1% compared to the prior year. Record estimated market share of 8.1%, up from 5.6% in the prior year.³

Select Protocols, Open Trading® & Workflow Tools

• $18.6 billion in total portfolio trading volume, up 136.2%. Approximately 55% of our portfolio trading volume was executed on X-Pro. Our estimated market share of U.S. high-grade portfolio trading was 21.8%, up from 12.8% in the prior year, and up from 15.4% in April. Portfolio trading represented an estimated 7.6% of total TRACE, up from an estimated 5.5% in the prior year, but down from an estimated 10.1% in April.
• 35% Open Trading share⁴ of total credit trading volume, up from 34% in the prior year.
• Dealer RFQ ADV of $1.1 billion across all credit products increased 24.1%.
• AxessIQ, the order and execution workflow solution designed for wealth management and private banking clients, achieved ADV of $147 million, up 28.8% from the prior year.

Rates

• Total rates ADV of $18.8 billion, up 15.2% versus the prior year.

Variable Transaction Fees Per Million (FPM)

• The preliminary FPM¹ for total credit for May was approximately $149, down from $164 in the prior year, but in line with $150 in April. The preliminary FPM for total rates was approximately $4.40, compared to $4.60 in the prior year.

*All comparisons versus May 2023 unless otherwise noted.

Table 1: May 2024 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
May-24	22/20	$32,172	$13,372	$6,122	$1,320	$3,074	$2,274	$577	$18,800	$18,072	$728
May-23	22/20	$28,354	$12,040	$5,763	$1,519	$2,524	$1,822	$403	$16,314	$15,907	$407
% Change		13%	11%	6%	(13%)	22%	25%	43%	15%	14%	79%

Table 1A: May 2024 estimated market share

	CREDIT				RATES
(unaudited)	High-Grade	High-Yield	High-Grade/High-Yield Combined	Municipals3	US Govt. Bonds3
May-24	18.6%	12.8%	17.2%	8.1%	2.2%
May-23	20.2%	16.7%	19.3%	5.6%	2.1%
Bps Change	(160) bps	(390) bps	(210) bps	+250 bps	10 bps

¹ The FPM for total credit and total rates for May 2024 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 The Company is highlighting the impact of single-dealer portfolio trading volume on U.S. high-grade and U.S. high-yield trading volume and estimated market share, but will continue to exclude single-dealer portfolio trading activity from each product’s aggregated trading volume and estimated market share and the total credit FPM calculation.
³ See “General Notes Regarding the Data Presented” below.
⁴ Open Trading share of total credit trading volume is derived by taking total Open Trading volume across all credit products where Open Trading is offered and dividing by total credit trading volume across all credit products where Open Trading is offered.
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.

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.

Beginning with January 2024, the Company is no longer providing Emerging Markets or Eurobonds market ADV or estimated market share.

In addition, for periods beginning with January 2024, the Company has made changes to the market volume data used to calculate estimated market share for Municipal and U.S. Government Bonds. 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. For U.S. Government Bonds, the previous data source for estimated market volumes was the Federal Reserve Bank’s Reported Primary Dealer U.S. Treasury Bond Trading Volumes, which was reported on a one-week lag. The new source for U.S. Government Bond trading volumes is FINRA’s U.S. Treasury TRACE data. The Company believes that the refined methodology used for Municipal Bonds, and the new data source for U.S. Government Bonds, provides more accurate measures of estimated market volumes and estimated market share. Prior comparable periods have been recast retrospectively for both Municipal and U.S. Government 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.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements, including statements about the outlook and prospects for Company, market conditions 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; 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; 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; risks related to sanctions levied against states or individuals that could expose us to operational or regulatory risks; 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, products or services; our vulnerability to malicious cyber-attacks and attempted cybersecurity breaches; 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 divergence of U.K. and European Union legal and regulatory requirements following 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; adverse effects as a result of climate change or other ESG risks that could affect our reputation; our future capital needs and our ability to obtain capital when needed; limitations on our operating flexibility contained in our credit agreement; our exposure to financial institutions by holding cash in excess of federally insured limits; 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 2,000 firms leverage MarketAxess’ patented technology to efficiently trade fixed-income securities. Our automated and algorithmic trading solutions, combined with our integrated and actionable data offerings, help our clients make faster, better-informed decisions on when and how to trade on our platform. 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.

Table 2: Trading Volume Detail
			Month Ended May 31,
In millions (unaudited)			2024								2023									% Change
			Volume				ADV				Volume					ADV				Volume				ADV
Credit
High-grade			$	134,675			$	6,122			$	126,777				$	5,763				6.2		%		6.2		%
High-yield				29,044				1,320				33,419					1,519				(13.1	)			(13.1	)
Emerging markets				67,625				3,074				55,533					2,524				21.8				21.8
Eurobonds				45,471				2,274				36,443					1,822				24.8				24.8
Other credit				12,836				582				9,076					412				41.4				41.3
Total credit trading1				289,651				13,372				261,248					12,040				10.9				11.1
Rates
U.S. government bonds2				397,586				18,072				349,959					15,907				13.6				13.6
Agency and other government bonds1				14,744				728				8,521					407				73.0				78.9
Total rates trading				412,330				18,800				358,480					16,314				15.0				15.2
Total trading			$	701,981			$	32,172			$	619,728				$	28,354				13.3				13.5
Number of U.S. Trading Days3							22									22
Number of U.K. Trading Days4							20									20
			Year-to-Date Ended May 31,
In millions (unaudited)			2024								2023									% Change
			Volume				ADV				Volume					ADV				Volume				ADV
Credit
High-grade			$	735,624			$	7,006			$	627,086				$	6,088				17.3		%		15.1		%
High-yield				145,839				1,389				183,754					1,784				(20.6	)			(22.1	)
Emerging markets				363,206				3,459				295,995					2,874				22.7				20.4
Eurobonds				216,884				2,085				196,737					1,929				10.2				8.1
Other credit				49,097				467				45,307					440				8.4				6.1
Total credit trading1				1,510,650				14,406				1,348,879					13,115				12.0				9.8
Rates
U.S. government bonds2				1,873,806				17,846				2,125,292					20,634				(11.8	)			(13.5	)
Agency and other government bonds1				61,582				591				44,792					438				37.5				34.9
Total rates trading				1,935,388				18,437				2,170,084					21,072				(10.8	)			(12.5	)
Total trading			$	3,446,038			$	32,843			$	3,518,963				$	34,187				(2.1	)			(3.9	)
Number of U.S. Trading Days3							105									103
Number of U.K. Trading Days4							104									102
1 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.
2 Consistent with industry standards, U.S. government bond trades are single-counted.
3 The number of U.S. trading days is based on the SIFMA holiday recommendation calendar.
4 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

Source: MarketAxess Holdings Inc.

FAQ

How did MarketAxess's total ADV change in May 2024?

MarketAxess's total ADV increased by 13.5% to $32.2 billion in May 2024.

What was the growth in total credit ADV for MarketAxess in May 2024?

MarketAxess reported an 11.1% growth in total credit ADV, reaching $13.4 billion in May 2024.

How did emerging markets ADV perform for MarketAxess in May 2024?

Emerging markets ADV for MarketAxess increased by 21.8% in May 2024.

What was the change in Eurobonds ADV for MarketAxess in May 2024?

Eurobonds ADV for MarketAxess rose by 24.8% in May 2024.

How did municipal bonds ADV change for MarketAxess in May 2024?

Municipal bonds ADV for MarketAxess surged by 43.2% in May 2024.

What was MarketAxess's U.S. high-grade portfolio trading market share in May 2024?

MarketAxess's U.S. high-grade portfolio trading market share was 21.8% in May 2024.

How did U.S. high-yield ADV perform for MarketAxess in May 2024?

U.S. high-yield ADV for MarketAxess decreased by 13.1% in May 2024.

What was the change in variable transaction fees per million (FPM) for MarketAxess in May 2024?

The preliminary FPM for total credit decreased to $149, down from $164 the previous year, and total rates FPM dropped to $4.40.