MarketAxess (MKTX) Piper Sandler Global Exchange and Trading Conference 2024 summary

Business performance and market trends

• Achieved 19% share in investment grade, 13% in high yield, and 22% in portfolio trading; municipal bonds reached a new high at 8%.

• International business, especially in Eurobonds and emerging markets, showed strong growth and record ADV in Q1.

• Market environment remains challenging, with low spread volatility and high demand for high yield paper impacting activity.

• Macro factors like elections and geopolitical events are expected to influence market conditions in the coming months.

• Electronic trading continues to expand, with electronification strongest in smaller trades and growing in block trades.

Product innovation and adoption

• X-Pro, a new EMS front-end, is central to delivering new features, especially for portfolio trading.

• 55% of portfolio trading notional volume now occurs via X-Pro, with adoption expected to rise.

• All new portfolio trading and high-touch features are being delivered exclusively through X-Pro.

• Ongoing innovation in portfolio trading protocols is anticipated, with future differentiation focused on workflow and analytics.

• Algorithmic trading capabilities, enhanced by the Pragma acquisition, enable breaking large blocks into smaller trades for better liquidity and higher fees.

Competitive landscape and strategy

• Competition in U.S. credit is strong, especially in portfolio trading, with Tradeweb noted as a key rival.

• Differentiation is expected to come from functionality and workflow, not pricing, as PTs are already competitively priced.

• Open Trading and Mid-X protocols are being developed to address both buy- and sell-side needs.

• Maintaining a lead in traditional client-to-dealer business, while innovating to attract and retain clients in competitive areas.

• International growth is driven by local market presence and connectivity, especially in emerging markets and Eurobonds.