NEW YORK - MarketAxess Holdings Inc. (NASDAQ:MKTX), a prominent electronic trading platform provider for fixed-income securities, has reported a substantial increase in trading volumes across several categories for the first quarter ended March 31, 2024. The company witnessed a record total credit average daily trading volume (ADV) of $15.0 billion, marking a 9.2% rise from the previous year.
Significant growth was observed in U.S. high-grade ADV, which surged by 18.0% to reach a record $7.5 billion. This increase outpaced the estimated market ADV growth of 21.3%. Despite this, MarketAxess's estimated market share slightly declined to 19.3%, down from 19.9% in the prior year.
Emerging markets also experienced a notable uptick with a 17.3% increase in ADV, totaling a record $3.6 billion. This growth was attributed to a 13.1% rise in hard currency trading ADV and a remarkable 29.8% jump in local currency markets ADV. The company's Latin America and Asia-Pacific clients contributed to this performance with record ADV levels, up 11.1% and 54.8%, respectively.
The Eurobonds sector also reached a new high with a 10.6% increase in ADV to $2.0 billion. Meanwhile, municipal bond ADV decreased by 6.4% to $419 million, with an estimated market ADV down by 18.5%. However, the estimated market share for municipal bonds improved to 6.5%, up from 5.7% the previous year.
Despite the growth in these areas, U.S. high-yield ADV fell by 29.4% to $1.4 billion. The company believes this decline was partially due to lower levels of credit spread volatility and a shift in focus to the new issue calendar by long-only client segments.
MarketAxess also highlighted a record $44.2 billion in total portfolio trading volume, a 40.6% increase. However, the total rates ADV saw a decrease of 27.9% compared to the prior year.
The preliminary variable transaction fees per million (FPM) for total credit for the first quarter were approximately $154, down from $165 in the previous year, mainly due to a shift in product mix. For total rates, the preliminary FPM was approximately $4.70, compared to $4.12 in the prior year.
MarketAxess CEO Chris Concannon noted the record levels of ADV across product areas and the role of the new MarketAxess X-Pro in increasing client engagement, with about 12.5% of U.S. credit trading volume executed on X-Pro in the quarter.
This report is based on a press release statement from MarketAxess Holdings Inc.
InvestingPro Insights
MarketAxess Holdings Inc. (NASDAQ:MKTX) has demonstrated a robust performance in the first quarter of 2024, as highlighted by their recent press release. To enrich the understanding of the company's financial health and market position, let's delve into some key InvestingPro Data and InvestingPro Tips.
InvestingPro Data reveals MarketAxess's market capitalization stands at a solid $8.12 billion, underpinning its significant presence in the electronic trading platform sector for fixed-income securities. The company's Price to Earnings (P/E) ratio is currently at 31.02, suggesting a high valuation by the market, which may be attributed to its consistent performance and innovative trading solutions like MarketAxess X-Pro. Moreover, the Price to Book (P/B) ratio as of the last twelve months is 6.28, indicating investors' willingness to pay a premium for the company's net assets.
From the InvestingPro Tips, it's noteworthy that MarketAxess has raised its dividend for 10 consecutive years, a testament to its commitment to returning value to shareholders. Additionally, the company has maintained dividend payments for 16 consecutive years, providing a sense of reliability and financial stability. It's also important to highlight that MarketAxess's liquid assets exceed its short-term obligations, ensuring the company is well-positioned to meet its immediate financial liabilities.
For investors looking to delve deeper into MarketAxess's financials and future prospects, InvestingPro offers additional insights. There are more InvestingPro Tips available for MarketAxess, which can be accessed by visiting: https://www.investing.com/pro/MKTX. To gain further insights and take advantage of these tips, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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