ASX Limited Share Trading Recommendation

Submitted by Craig Strzelecki on 3 May, 2007 - 18:22

ASX Limited has a Neutral 2 broker call and price target of $50.80 per share from market analyst UBS. April 2007 volumes report released: strong cash but soft IR futures: ASX today reported (pcp growth rates): (1) cash market volumes +48% (2) cash market value +31% (3) futures -13% (4) options -2%. While equity-related turnover remains strong due to buoyant market conditions, interest rate futures have softened on tough comps. YTD growth still ahead of our assumptions: The YTD numbers show: (1) cash market volume growth at 50% vs. our 35% (2) cash market value up 31% vs. 26% (3) futures 21% vs. our 20% (4) options down 4% vs -6%. A mark to market using these YTD figures implies a 3% upgrade to FY07E EPS. Open interest suggests futures volume pick up. The analyst considers the best short-term indicator for volumes to be open interest, whose growth remains very high, suggesting a strong quarterly roll month in June. Shifting rate expectations should also support volume growth. Their price target for ASX Limited is $50.80 (DCF-based) with a Neutral 2 rating PT = DCF x (1+WACC) - dividends. Positives: (1) mark to market upgrades (2) cost delivery (3) top line strength (4) ~$50m of rebates in 07E a cushion. Key risks to ASX Limited: (1) fee/rebate hurdle resets (2) cyclical mkts (3) potential capital drag in clearing.

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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