MarketAxess Announces First Casada Trade Via RFQ

Rhea-AI Summary

MarketAxess Holdings Inc. (MKTX) introduces trading in Brazilian debt instruments via RFQ protocol, supporting the first Casada trade with Safra as the buyside client. The Brazilian secondary debt market volume surged to $20 billion in trading ADV and over $4 trillion in the aggregate in 2023. MarketAxess aims to enhance liquidity discovery for investors with this new trading coverage.

Financial Analyst

The announcement by MarketAxess Holdings Inc. regarding the expansion of its electronic trading platform to include a full range of Brazilian debt instruments is a significant development for the fixed-income market. The introduction of Casada trades via Request-for-Quote (RFQ) protocol is particularly noteworthy. RFQ is a widely accepted trading mechanism that allows investors to solicit quotes from multiple dealers, enhancing price discovery and potentially leading to better execution prices. This could result in increased trading volumes and liquidity, which are critical for the efficient functioning of markets.

MarketAxess's focus on the Brazilian market is justified by the substantial trading volume reported by the Brazilian National Treasury, indicating robust activity and investor interest in the region. The integration of local currency bonds and the connection of local dealers with international clients through Open Trading could further deepen liquidity. For investors, this means improved access to a variety of debt instruments, which could lead to a more diversified portfolio and potentially mitigate risk through exposure to emerging market debt.

From a business perspective, MarketAxess is likely to benefit from first-mover advantages in the Brazilian electronic debt market space, potentially capturing a significant share of the trading volume. This strategic move may also positively impact their revenue and market position, which is an important consideration for stakeholders and investors evaluating the company's growth prospects.

Market Research Analyst

The expansion of MarketAxess's trading platform to include Brazilian debt instruments aligns with the broader trend of digital transformation within financial markets. The adoption of electronic trading platforms is accelerating globally and MarketAxess's enhancement of its Emerging Markets (EM) platform positions it as a key player in the digitization of fixed-income trading in Latin America. The significance of Brazil as a market is underscored by its large volume of bonds outstanding, which represents a considerable opportunity for MarketAxess to increase its market share in the region.

Moreover, the firm's innovation in offering RFQ protocols caters to a growing demand for more transparent and efficient trading mechanisms. This development could attract additional participation from both local and international investors, fostering a more interconnected and globalized market. MarketAxess's investment in its EM platform, particularly in countries like Brazil, indicates a strategic commitment to emerging markets, which could yield long-term benefits as these economies grow and their financial markets mature.

Economist

The integration of a full suite of Brazilian debt instruments into MarketAxess's electronic trading platform is likely to have macroeconomic implications. For the Brazilian economy, increased accessibility and liquidity in its debt market can enhance the attractiveness of Brazilian bonds to foreign investors. This could potentially lead to an inflow of capital, which might have a positive effect on the local currency and could help finance public spending or private sector growth.

However, it is also important to consider the risks associated with emerging market debt, such as currency volatility and political uncertainty. While the RFQ system improves transparency and liquidity, it does not mitigate these inherent risks. Investors and policymakers must remain cognizant of these factors when engaging with the Brazilian debt market. Nonetheless, the move by MarketAxess could support the broader trend of financial market integration, which is beneficial for the global economy as it facilitates the allocation of capital across borders.

Fixed-Income E-Trading Platform Now Supports Full Range of Brazilian Debt Instruments

NEW YORK & SAO PAOLO--(BUSINESS WIRE)-- MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, today announced the first client Casada trade executed via Request-for-Quote (RFQ) protocol on their Emerging Markets (EM) platform, with Safra as the buyside client. MarketAxess now provides trading in the complete spectrum of Brazilian sovereign debt instruments – including LFTs, LTNs, NTN-Fs and NTN-Bs.

This new comprehensive trading coverage comes as the Brazilian secondary debt market trading volume soared to $20 billion in trading ADV and more than $4 trillion in the aggregate in 2023, according to the Brazilian National Treasury. As the dominant protocol for fixed income electronic trading globally, the introduction of trading Casada via RFQ by MarketAxess supports greater liquidity discovery for local and international investors trading Brazilian debt strategies. A private RFQ auction allows investors to find transparency and liquidity on demand.

“We are extremely proud that we were able to support the first-ever Casada trade via RFQ,” said Maria Calderon, Head of Latin America Sales at MarketAxess. “This marks a pivotal moment for our Emerging Markets platform and the entire firm as Brazil represents one of the largest markets by value of bonds outstanding within Latin America. We will continue to innovate our robust EM platform with advances that we believe will benefit both onshore LATAM investors and global investors.”

The MarketAxess EM platform has more than 1,600 market participants in over 120 countries, with a worldwide liquidity pool and 28 local currency bond markets. In Q4 2023, MarketAxess launched Open Trading for local currency bonds to connect local onshore dealers with a network of international buyside clients, which significantly deepens the available liquidity pool. MarketAxess continues to invest heavily in emerging markets like Brazil, as this new diverse product range demonstrates the commitment to local clients and dealers who have previously expressed the need for RFQ protocols.

For more information, please visit: https://www.marketaxess.com/trade/latin-america/brazil

About MarketAxess

MarketAxess (Nasdaq: MKTX) operates a leading electronic trading platform that delivers greater trading efficiency, a diversified pool of liquidity and significant cost savings to institutional investors and broker-dealers across the global fixed-income markets. Over 2,000 firms leverage MarketAxess’ patented technology to efficiently trade fixed-income securities. Our automated and algorithmic trading solutions, combined with our integrated and actionable data offerings, help our clients make faster, better-informed decisions on when and how to trade on our platform. MarketAxess’ award-winning Open Trading® marketplace is widely regarded as the preferred all-to-all trading solution in the global credit markets. Founded in 2000, MarketAxess connects a robust network of market participants through an advanced full trading lifecycle solution that includes automated trading solutions, intelligent data and index products and a range of post-trade services. Learn more at www.marketaxess.com and on X @MarketAxess.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240304722483/en/

INVESTOR RELATIONS

Stephen Davidson

MarketAxess Holdings Inc.

sdavidson2@marketaxess.com

MEDIA RELATIONS

Marisha Mistry

MarketAxess Holdings Inc.

mmistry@marketaxess.com

Source: MarketAxess

What debt instruments does MarketAxess now provide trading in?

MarketAxess now offers trading in the complete spectrum of Brazilian sovereign debt instruments, including LFTs, LTNs, NTN-Fs, and NTN-Bs.

Who was the first client to execute a Casada trade via RFQ on MarketAxess' EM platform?

Safra was the first client to execute a Casada trade via RFQ on MarketAxess' EM platform.

What was the trading volume of the Brazilian secondary debt market in 2023?

The Brazilian secondary debt market volume surged to $20 billion in trading ADV and over $4 trillion in the aggregate in 2023.

How many market participants does MarketAxess EM platform have?

MarketAxess EM platform has more than 1,600 market participants in over 120 countries.

What did MarketAxess launch in Q4 2023 for local currency bonds?

In Q4 2023, MarketAxess launched Open Trading for local currency bonds to connect local onshore dealers with a network of international buyside clients.