Money Market Dealers in Australia - Industry Research Report

Declined: The COVID-19 pandemic and volatile conditions have reduced industry revenue

Performance in the Money Market Dealers industry has been taking a hit. Overall turnover volume has dropped, and corporate dept securities issuance declined after the COVID-19 outbreak. The RBA introduced the Term Funding Facility (TFF) in March 2020, which has provided authorised deposit-taking institutions (ADIs) with low-cost fixed-rate funding for three years. ADIs have been opting for longer-term options over short-term debt securities because of this funding, which has dampened industry performance. Revenue is expected to fall at an annualised 2.4% to $6.3 billion over the five years through 2022-23, and profit margins are also set to contract. This trend includes an estimated revenue decline of 3.5% in 2022-23, since demand has been low.

Money market dealers primarily buy and sell short-term debt securities, like bank bills and negotiable certificates of deposit. These businesses participate in the short-term money market and deal with other liquid placements. These businesses also hold and deal securities issued by the Federal Government. The industry also includes businesses that accept deposits and provide finance, but excludes the operations of banks, building societies and credit unions.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.