ASX Limited Australian Stockmarket

Submitted by Craig Strzelecki on 5 July, 2007 - 17:14

ASX Limited has a Neutral 2 recommendation and a share price target of $52.80 from Australian Stock Exchange analyst UBS. June 2007 volumes close off another record year: June volumes showed an acceleration of recent growth rates. On a daily avg basis: Cash market turnover was up 60% on pcp at $7.2bn p/day; Cash market trades increased 92%. Futures contract volumes increased 29%; Options increased 24%. Modest net upgrades on turnover and volumes: Including the effect of ASX's one-off additional $8.5m rebate in 2H07, we upgrade FY07E by nearly 5%. This largely flows through to FY08E given rebate structures in cash and futures markets. In addition, a more slightly optimistic (but still cautious) view on capital raisings activity within listings revenue adds an increment to FY08E earnings for 6% total upgrade. ASX positioning as a 'defensive growth' stock: The analysts' recent scenario analysis highlighted ASX as likely providing double-digit (or better) earnings growth under a range of flat or negative volume growth outcomes. Upside leverage to market activity growth is muted by the 75% incremental rebate to customers (25% to shareholders). However, with a CTI ratio in the high 20’s shareholders still benefit from significant operating leverage. New DCF-based price target $52.80, Neutral 2: PT = DCF x (1+WACC) – dividends. Positives for ASX Limited: (1) defensive revenue, with ~$60m of rebates in FY07E (2) strong operating environment (3) low capital intensity. Risks from the Australian Stock Exchange: (1) clearing capital demands (2) listings capital raisings cycle a revenue risk (3) still some technology capex to come.

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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