Bond trading platform MarketAxess Holdings exceeded third-quarter profit expectations on Wednesday, driven by robust activity in the bond market.
The company also announced that its founder and executive chairman, Rick McVey, will step down at the end of the year.
SIGNIFICANCE
The demand for investment-grade corporate debt generally rises in anticipation of falling interest rates, as investors seek to secure current yields.
Additionally, geopolitical uncertainties and economic concerns heighten investor interest in safe-haven assets, including Treasuries and other government bonds.
BACKGROUND
Increasing optimism regarding a soft landing for the U.S. economy has spurred a bond market rally in recent months, enhancing trading volumes on platforms like MarketAxess.
FINANCIAL HIGHLIGHTS
The company's third-quarter earnings reached $1.90 per share, surpassing analysts' average forecast of $1.85, according to data from LSEG.
Quarterly revenue increased by 20% to $206.7 million compared to the previous year, primarily due to higher commissions, which are a significant component of its total revenue.
The average daily trading volume for U.S. government bonds on MarketAxess' platform rose by 43% to $25.30 billion in the third quarter compared to the same period last year.
Total credit average daily volumes, reflecting the average daily number of bond transactions on MarketAxess' platform, increased by 27% to $14.12 billion.
The average daily trading volume for high-grade credit surged by 36% to $7.03 billion in the third quarter.