ASX reports a profitable half year but faces mounting pressures

Listed securities exchange business ASX has reported a profitable half year, a point that Elmer Funke Kupper, ASX managing director and chief executive, was keen to emphasise when announcing the result yesterday.
 
Revenues grew 5.9 per cent to A$348.7 million and net profit increased 4.7 per cent to $198.6 million.
 
However, as Funke Kupper also confirmed, competitive pressures have been making life more difficult, with ASX "restructuring" its fee schedule, a move that will cost it $4.6 million this financial year and $17 million in the first full year.
 
"During the half, the ASX Board approved a significant investment program in ASX's trading and post-trade platforms over the next three to four years. The program will start with the replacement of ASX's trading, risk management and market surveillance systems over the next 18 to 24 months," he said.
 
"The investment will create a more flexible exchange infrastructure and support innovation in Australia's financial markets, including the ability to trade instruments in multiple currencies.
 
Funke Kupper said the new infrastructure would also reduce the internal costs for ASX clients to connect to the exchange and reduce the time to market for new products.
 
"We expect to manage the program within a total group capital expenditure envelope of $40-50 million per annum," he said.
 
"In the second half of this year, the  ASX will open its new 24 hour customer support centre, which will be located in the ASX Australian Liquidity Centre. The newly launched technology program will further support Australia's ambitions to be one of the leading financial markets in the world."

ASX's listings revenue rose by 6.2 per cent, to $70.9 million. This includes annual listings fees, fees related to capital raisings and revenue from structured products.
 
New listing activity remained strong, with 71 IPOs compared to 69 in the previous year. There were 12 IPOs from the technology sector in 1H15 compared with four in the pcp. Total capital raised (including secondary) was $38.6 billion, up 5.1 per cent.