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MarketAxess (MKTX) Shares Up on Solid June Volume Statistics

Zacks Equity Research
·4-min read

MarketAxess Holdings Inc.’s MKTX total monthly trading volume of $578.5 billion for June 2020, reflected a whopping improvement of 216.4% year over year. This operator of a leading electronic trading platform for fixed-income securitiesand the provider of market data and post-trade services reported average daily volume (ADV) of $26.3 billion, surging 187.6% year over year. This upsurge can be attributed to robust volumes across the company’s product lines.

Notably, there were 22 trading days in June this year versus 20 days in June 2019. Shares of MarketAxess gained 3.8% in the day’s trading of July 6 in response to the impressive volumes.

In June, the company’s total credit ADV of $12.1 billion surged 36.2% year over year while overall trading volume of $266.5 billion climbed 49.9% year over year. MarketAxess also reported $312 billion in rates volume.

Moreover, U.S. high-grade trading volume of $143.6 billion expanded 57.3% year over year. Emerging markets’ ADV and overall trading volume were $2.4 billion and $52.6 billion, respectively, up 13.7% and 25.1% year over year.

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For June, Eurobond ADV of $1.3 billion improved 17.6% year over year while overall trading volume of $29.2 billion rose 29.3% year over year. MarketAxess’ preliminary variable transaction fees per million (“FPM”) came in at $181 for U.S. high-grade, $205 for other credit, $192 for total credit and $4.00 for rates for the quarter ended Jun 30, 2020. However, the same is preliminary and is subject to revision.

Q2 Volumes Bode Well

MarketAxess also reported second-quarter 2020 volumes. While the company’s ADV of $27 billion soared 221.2% year over year, total trading volume in the second-quarter 2020 of $1.7 trillion skyrocketed 222.1% year over year.

Furthermore, the company’s total credit ADV of $11.8 billion surged 44.2% year over year while overall trading volume of $ 741.8 billion advanced 44.4% year over year. MarketAxess also reported $955.6 billion in rates volume.

In the second quarter, U.S. high-grade trading volume of $414.6 billion expanded 56.2% year over year. Emerging markets and Eurobonds’ ADV were $2.3 billion and $1.3 billion, respectively, up 14.4% and 17.3% year over year.

Shares of the Zacks Rank #2 (Buy) company have gained 52.5% in the past year against the industry’s decline of 1.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Apart from impressive volumes, the company’s solid trading volumes have generated robust commissions, which in turn, have consistently contributed to the top line. As a result, the company’s revenues have witnessed a CAGR of 14.2% in the past five years (2014-2019). MarketAxess is also uniquely positioned to grow, courtesy of its automated trading platform as the bond trading is taking a digital route especially following the COVID-19 outbreak.

Recently, other securities exchanges, namely Cboe Global Markets, Inc. CBOE, CME Group Inc. CME and Intercontinental Exchange Incorporation ICE, also reported monthly volumes. Cboe Global’s options ADV was 10.6 million contracts in June, up 49.9% year over year.CME Group recorded an ADV of 17.1 million contracts in the month, down 26% year over year.Intercontinental Exchange’s equity options ADV was up 85% year over year.

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This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.

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Cboe Global Markets, Inc. (CBOE) : Free Stock Analysis Report
 
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CME Group Inc. (CME) : Free Stock Analysis Report
 
MarketAxess Holdings Inc. (MKTX) : Free Stock Analysis Report
 
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