NEW YORK - MarketAxess Holdings Inc. (NASDAQ:MKTX), a leading electronic trading platform for fixed-income securities, has reported notable increases in trading volumes and market share for the month of May 2024. The company saw a 13.5% rise in total average daily volume (ADV) to $32.2 billion, with significant growth across various segments.
U.S. high-grade ADV climbed 6.2% to $6.1 billion, despite a slight decrease in estimated market share from the previous year. The overall increase was attributed to a combined 35% rise in portfolio and dealer-to-dealer trading volumes, which accounted for roughly 72% of the market's year-over-year growth.
In contrast, U.S. high-yield ADV experienced a downturn, falling 13.1% to $1.3 billion. MarketAxess believes this decline in estimated market share was partially due to reduced credit spread volatility and a shift in focus toward new issues by long-only clients. Despite this, U.S. high-yield new issuance surged by 51.5% from the prior year, reaching $33.6 billion in May.
Emerging markets and Eurobonds segments posted robust gains, with ADVs increasing by 21.8% and 24.8%, respectively. Municipal bonds also saw a significant uptick, with a 43.2% rise in ADV and a record estimated market share of 8.1%.
MarketAxess highlighted its success in portfolio trading, where approximately 55% of the volume was executed on its X-Pro platform, contributing to an estimated U.S. high-grade portfolio trading market share of 21.8%.
The company's Open Trading platform maintained a strong presence, accounting for 35% of the total credit trading volume, a slight increase from the previous year. Dealer RFQ ADV across all credit products rose by 24.1%, and AxessIQ, the workflow solution for wealth management and private banking clients, grew by 28.8% in ADV.
In the rates segment, total rates ADV went up by 15.2% compared to the prior year. However, variable transaction fees per million (FPM) for total credit and total rates in May showed a slight year-over-year decrease.
MarketAxess operates a renowned electronic trading platform that emphasizes efficiency, liquidity, and cost savings. Its automated and algorithmic trading solutions, along with integrated data offerings, support clients in making informed trading decisions.
This article is based on a press release statement from MarketAxess Holdings Inc. and does not include any promotional content. The reported figures are subject to revision and the company does not commit to updating fee information in future communications.
In other recent news, MarketAxess Holdings Inc. reported a 4% increase in total revenue for Q1 2024, reaching $210 million, with earnings per share at $1.92. Despite a decrease in U.S. credit market share, the company underscored its expanding global client base and record commission revenues.
MarketAxess also reported a 13.5% year-over-year increase in its overall average daily volume (ADV) for May 2024, reaching $32.2 billion. Still, the firm noted a decrease in U.S. high-yield ADV and market share, partially attributed to lower credit spread volatility and a focus on new issue calendars.
Meanwhile, Citi reaffirmed its Buy rating and $310.00 price target for MarketAxess, following the company's disclosure of its ADV metrics. On the other hand, Keefe, Bruyette & Woods adjusted its price target for MarketAxess, reducing it to $230 from $235, while maintaining a Market Perform rating. This adjustment followed the company's recent financial performance, which surpassed the firm's expectations, despite a four-cent impact from lower revenues.
These are recent developments highlighting the company's performance in fixed-income electronic trading, advancements in trading protocols, workflow tools, and adjustments by analyst firms. It's important to note that these facts reflect the latest happenings and do not provide a comprehensive view of the company.
InvestingPro Insights
As MarketAxess Holdings Inc. (NASDAQ:MKTX) continues to demonstrate growth in trading volumes and market share, a closer look at the company's financial health and stock performance provides additional context for investors.
MarketAxess's commitment to dividend payments is noteworthy, with the firm raising its dividend for 10 consecutive years and maintaining payments for 16 years. This consistency is a testament to the company's stability and dedication to shareholder returns. Moreover, MarketAxess's cash flows are robust enough to sufficiently cover interest payments, signaling a strong financial position that supports its dividend strategy.
The company's stock is currently trading near its 52-week low, which might present a buying opportunity for value investors, especially considering that MarketAxess has been profitable over the last twelve months. Still, it is important to note that the stock is trading at a high Price/Book multiple of 5.71. This suggests that the market may be expecting future growth or that the company's assets have a high intrinsic value. With a market capitalization of $7.54 billion and a Price/Earnings (P/E) ratio of 29.09, MarketAxess is valued higher than the industry average, reflecting investor confidence in its future earnings potential.
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