MarketAxess launches Open Trading for EM local currency bonds

Rick Steves

In an era where diversification and hedging against market risks have become imperative, this new feature could very well serve as a linchpin for international investors looking to diversify their fixed-income portfolios with EM local currency bonds.

MarketAxess Holdings Inc., a leading operator in the fixed-income electronic trading sphere, announced a pivotal extension to its Emerging Markets (EM) product range. The firm is launching Open Trading for local currency bonds in Poland, Czech Republic, Hungary, and South Africa, marking a significant milestone in democratizing the EM debt markets.

“As a global leader in Emerging Markets debt trading, expanding Open Trading across our 28 local markets is something our clients around the world have been asking us for,” commented Christophe Roupie, Head of EMEA and APAC at MarketAxess. “Expanding Open Trading in these four new local markets is only the first step, and we hope to expand the model further to more local currencies in the first half of next year.”

MarketAxess connecting local onshore dealers

MarketAxess’s Open Trading platform, initially launched in 2012, serves as an all-to-all trading environment designed for corporate bonds. It creates a diversified pool of liquidity, thus facilitating better price discovery and reduced trading costs for clients. The new service is geared toward connecting local onshore dealers in the four aforementioned markets with an extensive network of international buy-side clients. This is expected to significantly enhance liquidity in these markets.

The data backs up the timeliness and relevance of this expansion. In the first half of 2023, EM local currency bonds made up over 40% of MarketAxess’s global EM volumes, which stood at a robust $360 billion. The extension of Open Trading to include local currency bonds responds directly to a gaping market need, potentially unlocking liquidity and democratizing access to EM debt markets in currencies that are often less accessible for international investors.

Open Trading aims to break down barriers in the EM local currency bonds market, much in the same way it has in the broader corporate bond market. Market participants can interact either on a disclosed or anonymous basis, giving both institutional and retail investors greater flexibility.

MarketAxess’s new offering adds to a trend of electronic trading platforms moving toward more inclusive financial markets. In an era where diversification and hedging against market risks have become imperative, this new feature could very well serve as a linchpin for international investors looking to diversify their fixed-income portfolios with EM local currency bonds.

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