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MarketAxess (MKTX) Q4, December Volume Up on Robust Rates Volume

MarketAxess Holdings Inc. MKTX reported total trading volume for the fourth quarter of 2021. Concurrently, MKTX reported volume for December 2021.

In the fourth quarter, the total trading volume was $1.8 trillion during the 62 trading days of the quarter. The figure improved 20% from the prior-year comparable period.

MKTX’s quarterly volume benefited from solid contributions made by rates and total other credit volume. While rates volume gained on higher U.S. Treasury bonds trading volume, strong performances of Emerging markets and other credit products contributed to total other credit volume. However, the upside was partly negated by dismal performance in the U.S. high-grade product line of MarketAxess.

MKTX’s rates volume surged 46% year over year to $1.2 trillion in the quarter under review. Meanwhile, MarketAxess reported a total other credit volume of $326.5 billion, which inched up 1.7% year over year. However, the U.S. high-grade trading volume plunged 12.7% year over year to $277.9 billion.

This operator of a leading electronic trading platform for fixed-income securities announced an average daily volume (“ADV”) of $29.2 billion for the fourth quarter. The metric improved 23.7% year over year. ADV of the rates and total other credit products of MarketAxess rose 45.9% and 1.7%, respectively, year over year. However, for the U.S. high-grade product line, the provider of market data and post-trade services for the global fixed-income markets reported a 12.8% decline in ADV.

Increase in December Volume

MarketAxess’ trading volume during the 22 trading days in December amounted to $538.1 billion, which advanced 13.9% year over year. The improvement came on the back of 31.9% growth in rates trading volume. However, the monthly volume was partly offset by declines of 16.9% and 2% in volume pertaining to U.S high-grade and total other credit products, respectively

MKTX’s December ADV of $24.5 billion improved 14% year over year, driven by a contribution of 31.9% by the rates product line. However, the metric has been partly affected by declines of 16.9% and 2.2% in ADV of the U.S. high-grade and total other credit products, respectively.

MarketAxess’ core product offerings of U.S. high-grade, U.S. high-yield and Eurobonds continue to gain from accelerating market share gains. The rise in trading volumes is anticipated to provide a boost to one of the most significant drivers of MKTX’s top-line growth — commissions. The company resorts to buyouts and collaborations for bolstering its product portfolio and extending its global reach.

Leveraging technological advancements, MarketAxess launched the Open Trading platform almost a decade ago. The platform, being an electronic all-to-all credit trading marketplace, continues to fetch new client volumes to the company. The platform seamlessly connects market participants from all over the world to a varied network of more than 1,800 investor and dealer firms. The marketplace has benefited clients with ample credit market liquidity and substantial reduction in transaction costs.

Other Companies Reporting December 2021 Volumes

CME Group CME reported ADV of 18 million contracts for December. ADV improved 26% year over year, attributable to higher volumes in three product lines. CME’s interest rate volume of 7.1 million contracts per day increased 41%. Equities volume of 6.8 million was up 45% while Energy volume of 1.9 million contracts increased 5% year over year.  

Intercontinental Exchange’s ICE average daily volume (ADV) in the month decreased 5.5% to 4.6 million largely attributable to drop in Financial ADV. ICE’s Agriculture and Metals ADV of 0.3 million contracts declined 1.8%. Energy volume increased 6.7% to 2.6 million contracts per day. Commodities ADV increased 5.8% to 2.9 million in December.

CBOE Global CBOE reported multiply-listed options ADV of 9.9 million contracts for December, up 8.1% year over year, driven by solid performance in Options and Futures volumes. CBOE’s Index options ADV improved 49.2% year over year, while futures ADV surged 57.1% year over year.

Zacks Rank & Price Performance

Shares of MarketAxess have lost 15.8% in the past six months against the industry’s rally of 7.4%.

Image Source: Zacks Investment Research

MKTX currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of CME Group, Intercontinental Exchange and CBOE Global have gained 9.4%, 12.2% and 6.2%, respectively, in the past six months. 

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Intercontinental Exchange Inc. (ICE): Free Stock Analysis Report
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