Text size

MarketAxess: Helping Asia bond investors navigate market volatility

Listen to article

This is a sponsored article from MarketAxess.

Riad Chowdhury – Head of Asia-Pacific (RC)
Erik Tham – Head of Global Private Banking Product (ET)

  1. MarketAxess has been named Best Trading and Execution Platform at the Technology Awards for the 2nd consecutive year. What do you think makes MarketAxess an increasingly indispensable tool for fixed income trading in the Asian private bank industry?

    RC: Our goal has always been to address the needs of our Asian private banks and wealth management clients to increase their operational efficiency, extend their reach into new pools of liquidity, improve their ability to execute at best price, and to access highly accurate and transparent pricing data. These features have been more important than ever in the past year when a meltdown across the region’s high-yield issuers prompted an evaporation of liquidity. As in the past, we demonstrated we were more than up to the task during crisis periods. Our order and execution workflow solution Axess IQ, which was rolled out to Asia clients in 2021, helped private banks in the region to better manage high-order volumes during the market tumult. Among the features that proved valuable to their bond trading desks were the ability to monitor queues of open orders and to automatically process and prioritise certain orders, as well as aggregating liquidity and market data into a single view.

  2. Can you tell us more about Axess IQ? In what way does it help improve traders’ workflow?

    ET: Axess IQ is essentially a one-stop trading shop tailored specifically for the unique needs of private banks’ trading desks. It is an interface that provides a range of functionalities for fixed income traders, including the order management and execution capabilities they need to fundamentally reorganize their workflow to be more effective. Axess IQ is fully integrated with Open Trading®(OT), our all-to-all network, that allows all dealers and investors to trade directly with one another anonymously. In Q2 2022, the number of unique client firms that have executed an OT transaction reached a record 1,748. The combination of Axess IQ and Open Trading allows users to source new liquidity in different market conditions and at the same time automate the execution of their numerous smaller orders, freeing up time so traders can focus on larger or more complex trades. Axess IQ also includes proprietary MarketAxess data & analytics that deliver accurate pre-trade prices for a broader universe of corporate bonds than any other platform. This unique data is also available to Relationship Managers, who can use Axess IQ as a highly efficient communication channel to their trading desk for sharing real-time market insight and order information.

  3. What is the role of automation in fixed income trading for private banks at the moment and where do you see things going?

    ET: Currently, automation is being widely adopted across many foreign exchange and equity trading desks. The pace of adoption for fixed income, given its more complex liquidity structure, has been slower. But with many global private banks and wealth management firms leading the way, auto-execution has now become a standard tool on most fixed income trading desks and we may see the transformation to further accelerate soon. We continue to see growth in trade automation across the board despite increased in volatility – in Q2 2022 we saw a record $57.6 billion in Auto-X (our automation solution) volume, up 39% from 2Q21, and a record 305, 000 trades completed using automated execution, up 40% from 2Q21.Private banks have clear incentives, as one of their unique features is that trading desks often have to handle a diverse mix of small and large block orders. As such, many of them are already adopting automation for transactions that require less human intervention. This has hugely improved efficiency as it frees up traders to focus on the more complicated tickets.

  4. Can you tell us more about the growth of your Asian private banking business? And what is the plan for the region moving forward?

    RC: The volume of trades executed via the MarketAxess platform by regional private bank clients grew by double digits in 2021, easily outstripping the equivalent number for the global business. This demonstrated how our business in this area has kept going from strength to strength. On the product front, with growing global interest in the region’s debt markets, we have also significantly bolstered our local currency offerings. In September 2021, we also added Bond Connect and CIBM Direct schemes to our platform, allowing private banking and wealth management clients to trade onshore Chinese debt with onshore market makers.
    The overall picture for MarketAxess in the region remains very positive, in fact, in Q2 2022 the platform saw a record $27.3 billion in APAC emerging markets trading volume, up 59%. We already have clients across the Asia-Pacific region trading actively on our platform across a wide range of global fixed income markets and we will continue to expand and grow our team. On the product side, innovation is the cornerstone of our business and we will continue to invest in product design and development in partnership with our clients, exactly as we have been doing for the last 22 years.Visit here to learn more.

This is a sponsored article from MarketAxess.