Secondary Market Activity Decreases Again

Market & Pricing

In contrast to the up and down pattern we’ve become accustomed to with the Secondary Market, January’s activity continued to decline from December’s drop, falling to €223,396 in January. Overall, activity saw a drop of 10.8%. Let’s take a more detailed look:

Secondary Market activity decreases again.
Secondary Market activity decreases again.

Portfolio Manager continued on its downward path we’ve seen from December, falling further by 25.7%. Manual transactions also fell in January by 24.2%. But API transactions bucked the trend and increased its value of transactions by 25.5%. As always, Manual transactions had the highest value, totaling €121,040 in transactions.

Secondary Mark total volume – January 2022
Secondary Mark total volume – January 2022

Current loans

As we saw in previous months, current loan transactions continue to make up most of all transactions, with €172,711. It increased its value of transactions by 5.2% to €172,711. Manual transactions had the majority share (47.0%), followed closely by API transactions with a 43.4% share. Portfolio Manager transactions make up the remaining 9.6%. 

In December, transactions at par were the most popular, but transactions sold at premium achieved this spot in January, with 64.5% sold at a profit. Loans sold at a discount increased to 7.9% of all transactions, and those sold at par had a 27.6% share.

Secondary Market current loan transactions – January 2022
Secondary Market current loan transactions – January 2022

Overdue loans

In January, Secondary Market overdue loan transactions totaled €26,959—declining by 23.7% after increasing the previous month. This decrease can be directly attributed to the shrinkage of loans sold at a discount, which shrank by 52.9%. On the other hand, transactions at par and premium increased by 13.8% and 30.4%, respectively.

In contrast to the massive increase last month, Manual transactions dropped by 32.3% in January. And again, moving in the opposite direction than last month, API transactions increased by a slight 4.8%.

Secondary Market overdue loan transactions – January 2022
Secondary Market overdue loan transactions – January 2022

Defaulted loans

Defaulted loan transactions reversed the trend of the last two months and decreased by 53.5%. But one trend that remained the same was the strength of defaulted loan transactions at a discount. This category maintained an 86.8% share of all defaulted loan transactions, despite declining by 54.4%. Rebounding after falling in December, transactions at par increased by 413%. And after gaining traction last month, transactions at premium fell again from €5,510 to €1,634 in January.

Manual and API transactions decreased by 55.6% and 12.7%, respectively.

Secondary Market defaulted loan transactions – January 2022
Secondary Market defaulted loan transactions – January 2022

Another month of decreases in Secondary Market Activity

The Secondary Market started 2022 very similar to how it ended 2021—with a drop in activity.

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 in the coming months as spring approaches.

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