Downward Trend in Secondary Market Activity

Market & Pricing

March’s increase in transactions was a brief uptick in Secondary Market activity, as transactions declined again in April by 9.5%. A total of €150,328 was transacted on the Secondary Market. Read more:

April showed a downward trend in Secondary Market activity.
April showed a downward trend in Secondary Market activity.

All the categories showed a decrease in growth, except for Portfolio Manager transactions, which increased by 8.9% from March. This is its 2nd increase in a row, this month by 8.9%. It now has €8,843’s worth of transactions. It holds a 5.9% share of all transactions on the Secondary Market.

The most significant decline came from Manual transactions, which decreased by 16.5%. This category also has the largest share of transactions, with 53.4%. In March, the API’s growth rate was an impressive 26.9%, but it declined by 0.5% in April. It still has the 2nd largest value with €61,238’s worth of transactions—a 40.7% share of all transactions.

Secondary Mark total volume – April 2022
Secondary Mark total volume – April 2022

Current loans

Overall, current loan transactions declined by 8.7%, nearly the same percentage as the previous month’s growth rate of 8.2%. A total of €121,114 was transacted, with decreases noted across all three categories.

Once again, loans sold at a premium are the most popular and make up 71% of all current loan transactions. This is despite an overall decrease of 7.9% in this category, coming to a total of €86,003. Loans sold at par make up a 26.6% share, and loans sold at a discount make up a 2.3% share.

Secondary Market current loan transactions – April 2022
Secondary Market current loan transactions – April 2022

Overdue loans

April’s overdue loan transactions totaled €16,824, a 2.5% decrease from March. Once again, loans sold at a discount, at a premium, and at par all had a relatively equal share of transactions, with the latter taking the top spot.

Once again, manual transactions declined, this month by 12.6%. But it still manages to take a 64.3% share with €10,815. The API accounts for the remaining 23.2%, equal to €6,009. The API had a mammoth growth rate of 23.2%.

Secondary Market overdue loan transactions – April 2022
Secondary Market overdue loan transactions – April 2022

Defaulted loans

After its first increase in 3 months last month, defaulted loan transactions decreased again in April. It decreased by 23.2% to a total of €12,390 transactions. Manual transactions had an 80.3% share, and API transactions had a 19.7% share. The latter decreased by 25.4%.

Loans transacted at a discount dominates this category, with a 98.1% share of all current loan transactions. Transactions at par and at premium diminish in comparison, as you can see below.

Secondary Market defaulted loan transactions – April 2022
Secondary Market defaulted loan transactions – April 2022

Secondary Market comes in lower in Q2

After rebounding at the end of Q1, we saw a new decline in Secondary Market activity in April. It’s become the norm to see activity on the Secondary Market rise and fall. So, even though we see a decline now, it could well be that next month, there will be another increase on the horizon.

As more investors opt for the hands-free Go & Grow investment method, it’s natural to see a drop in manual buying and selling of loans on the Secondary Market. But, as the Secondary Market activity is known to go up and down, let’s see if the activity will pick up again.

Remember, investors should not seek higher returns from buying and selling loans on the Bondora secondary market.