MarketAxess beats Q1 profit estimates as trading in credit, Eurobonds hits record

MarketAxess Holdings

07/05/2024 12:30

May 7 (Reuters) - Bond trading platform MarketAxess
Holdings  MKTX.O  beat estimates for first-quarter profit on
Tuesday, helped by record activity in total credit and
Eurobonds.
    MarketAxess' credit segment includes bonds which are
high-grade, high-yield and municipal-issued, among others. 
    High-grade or investment-grade bonds typically have a lower
risk of default and smaller returns compared with high-yield or
junk bonds.
  
    WHY IT'S IMPORTANT 
    Expectations of interest-rate cuts changed rapidly during
the first quarter and induced significant volatility in the
global bond markets. 
    The trajectory of potential rate cuts in the U.S., euro zone
and emerging markets continues to remain cloudy as central banks
weigh whether inflation has declined meaningfully and underlying
price pressures have slowed. 
    Meanwhile, higher interest rates have also raised the demand
for safe-haven bonds across Treasury and corporate segments as
they offer investors steady risk-free returns. 
    
    CONTEXT
    MarketAxess operates an electronic trading platform allowing
institutional investors and broker-dealer firms to trade
corporate bonds and other fixed-income securities. 
    Exchange operators typically do better when the markets are
volatile as investors rejig portfolios more actively to cut
risk, helping drum up trading volume. 
    
    BY THE NUMBERS 
    MarketAxess' net income of $1.92 per share in the three
months ended March 31 beat analysts' estimates of $1.87 per
share, according to LSEG data.     
    Revenue in the first quarter rose to $210 million, compared
with $203 million in the year-ago quarter. 
    It posted record quarterly total credit average daily volume
(ADV) of $15 billion, up 9.2% from a year earlier.
    MarketAxess's Eurobonds ADV increased 10.6% to a record $2
billion and emerging markets ADV of $3.6 billion climbed 17.3%
in the first quarter. 
           

 (Reporting by Sri Hari N S and Manya Saini in Bengaluru;
Editing by Krishna Chandra Eluri)
 ((Manya.Saini@thomsonreuters.com;))