ASX limited (ASX) Update

Submitted by Jim Thesiger on 6 May, 2008 - 12:24

Macquarie Research Equities (MRE) reviews the monthly change data for ASX limited (ASX) and reaffirms their counselling for the stock.

ASX Limited (ASX): Rolling with the Punches

ASX has been the subject of much scrutiny over the last 6 months given the extent of market volatility and credit market decline. The company successfully leveraged off the back of the last bull market and positioned itself as a key stock in the diversified financial space. On the 7th March the stock hit an 18 month low at $33.70 but has since rebounded 11.87% to date. Macquarie Research Equities (MRE) reviews the monthly trade data for ASX and reaffirms their guidance for the stock…

  • ASX volume Growth Outpaces value in April. Cash market volumes for April grew 88% on pcp. Trade value also increased by 4% to $113.5bn which is down 11% on pcp. It is also interesting to note that average daily trade value has been impacted by the 8.1% decline in market capitalisation.
  • Earnings Sensitivity to volumes.Given the ASX only receives 25% of revenue benefits when daily trade value exceeds $3.1bn per day, MRE feel that any EPS revisions would be minor for FY08.
  • Market conditions take their toll in other areas. SFE trading was down 6% on pcp, however as the threshold level of 73.38m contracts has been met for SFE markets based on year to date activity EPS sensitivity is again likely to be relatively minor. Furthermore, 75% of the revenue benefit is being paid to brokers in the form of rebates as per the SFE large volume rebate scheme. There were also no IPO’s during April reflecting poor market conditions and secondary capital raisings were only $4.3bn compared to $5.6pcp