ASX Limited Update

Submitted by Craig Strzelecki on 3 April, 2007 - 18:57

ASX Limited has witnessed another record trading month as observed by market analyst Macquarie Research Equities. The analyst has given ASX Limited a reiterated Outperform recommendation. Despite increased market volatility, the ASX posted another month of strong trading activity during March. The total value traded on the ASX during the month was approximately $135b, which was another record for the month of March and is up 33% on pcp. This equates to $6.1b of value traded per day and is slightly ahead of our forecasts of $6.0b. The analyst retains their bullish view on the outlook for the stock, despite it's strong performance this year already – up 17%. If trading growth continues, further upgrades likely. The analyst have upgraded their trading forecasts on 5 March following sustained strength in levels of trading activity and now sits at the upper end of revenue forecasts relative to consensus. If trading activity continues to grow at the current rate, the analyst would expect approximately 1% to 1.5% NPAT upgrades for FY07. ASX continues to deliver strong results driven by the uplift from the SFE acquisition, a continuation of robust trading volumes and a better than expected improvement on the cost front. The analyst reiterates their outperform recommendation with ASX remaining their preferred diversified financials exposure. While at the higher end of its historic PE valuation range, the likely further upside from merger benefits, positive structural momentum from guaranteed super capital flows, growth in DMA/hedge fund activity and attractive industry position, supports the sustainability of the current PE multiple of 24.5x (compares to 27.5x for global peers or 26.0x excluding high growth markets). Momentum in trading volumes and velocity, likely further upside to SFE synergy benefits and the monopolistic franchise of trading, clearing and settlement functions support the analyst's investment thesis.

ASX Limited is listed on the Australian Stock Exchange (ASX) under stock code ASX. You can view their investor website here. ASX was listed on the ASX on 14 October, 1998. Maurice Newman is the chairman of ASX while Robert George Elstone is the managing director. The company is the economic entity provides stock exchange and ancillary services in Australia. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade ASX. Check your charts and good luck with your share trading!

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