(Reuters) – Bond trading platform MarketAxess Holdings beat third-quarter profit estimates on Wednesday, helped by strong activity in the bond market.
The company also said its founder and executive chairman, Rick McVey, will retire at the end of the year.
WHY IT’S IMPORTANT
Demand for investment-grade corporate debt typically increases amid anticipation of declining interest rates as investors rush to lock in current yields.
Geopolitical tensions and concerns about the economy also boost investor appetite for safe-haven assets such as Treasuries and other government bonds.
CONTEXT
Growing expectations of a soft landing for the U.S. economy have led to a rally in the bond market in recent months, boosting trading volumes on platforms such as MarketAxess.
BY THE NUMBERS
The company’s third-quarter profit of $1.90 per share came in above analysts’ average estimate of $1.85, according to data compiled by LSEG.
Its quarterly revenue rose 20% to $206.7 million from a year earlier, driven by increased commissions that constitute a major part of its total revenues.
The average daily trading volumes for U.S. government bonds on MarketAxess’ platform was up 43% at $25.30 billion during the third quarter from a year ago.
Total credit average daily volumes, which is a measure of the average daily number of bond transactions on MarketAxess’ platform, rose 27% to $14.12 billion.
The average daily trading volume for high-grade credit climbed 36% to $7.03 billion in the third quarter.
(Reporting by Vedant Vinayak Vichare; Editing by Shreya Biswas)
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