Yahoo Finance MarketAxess (MKTX) Uses EM Platform to Boost Brazil Presence
MarketAxess Holdings Inc. MKTX leveraged its Emerging Markets (“EM”) platform to support the first Casada trade carried out through the Request-for-Quote ("RFQ") protocol. With Safra being the buy-side client, the move also marks the first time such a capability is being introduced for trading in the whole spectrum of Brazilian sovereign debt instruments, ranging from LFTs, LTNs and NTN-Fs to NTN-Bs.
The newly launched capability also seems to be time opportune as the RFQ is considered to be the reigning protocol in the electronic trading of fixed-income securities across the globe. The electronic RFQ mechanism enables buy-side firms to send concurrent requests for price quotations to multiple liquidity dealers, with whom they may not even share an existing relationship. Therefore, it can give rise to increased competitive pricing and wider access to liquidity.
As a result of the latest move, MarketAxess aims to enhance the available liquidity pool and offer higher trading opportunities for onshore LATAM and international investors trading in Brazilian debt instruments. The newly launched facility is expected to fetch more clients to its EM platform, subsequently grow the related trading volumes and lead to a solid foothold across Brazil. Higher EM trading volumes are expected to drive the performance of MKTX’s credit product category.
An increase in trading volumes usually boosts commissions, the most significant top-line contributor of MarketAxess. The EM trading volume improved 3.5% year over year in 2023.
The latest announcement also reflects MKTX’s prudence since the secondary debt market of Brazil holds immense growth potential. Per the Brazilian National Treasury, the market’s trading average daily volume climbed to $20 billion in 2023. Also, Brazil ranks as one of the largest markets in the Latin America region in terms of bond value outstanding. Hence, the investment pursued by MarketAxess in emerging markets of Brazil demonstrates the timeliness of the recent move.
MKTX’s EM platform encompasses more than 1,600 market participants spread in more than 120 countries. It also enables clients to trade local currency debt across 28 markets and with more than 130 broker-dealers. In October 2023, MarketAxess introduced Open Trading for local currency bonds of Poland, Czech Republic, Hungary and South Africa in a bid to boost the performance of its EM trading product.
Shares of MarketAxess have declined 2.8% in the past six months against the industry’s 26.9% growth. MKTX currently carries a Zacks Rank #3 (Hold).
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Shares of First Internet Bancorp, Affiliated Managers and Euronet have gained 72.8%, 18.7% and 29%, respectively, in the past six months.
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