ASX: Technological change presents new opportunities for Australia
01 May 2018 Sydney
Image: Shutterstock
Across the financial services industry and all other industries, Australia is experiencing “a wave of technological change that presents new opportunities”, according to Dominic Stevens, managing director and CEO of the Australian Stock Exchange (ASX).
During a presentation at the 2018 Macquarie Australia Conference, suggested that the country's future growth will come from new products and services that leverage existing platforms, operational capabilities, its brand and its trusted independent position.
He said: “As such, we are accelerating our program to decommission older technologies and upgrade critical infrastructure to enable us to build new, contemporary products and services that will serve us, and the industry, for the next 20 years.”
Stevens also revealed that ASX’s results for the nine months to 31 March this year are up on the prior comparative period (pcp), which was helped by a very strong March quarter.
He noted that revenue was up 11.6 percent on the prior corresponding quarter and is now up 7.6 percent on pcp year-to-date.
Typically, our third fiscal quarter, which includes the traditionally quiet month of January, is a weaker quarter.
However, this year revenue held up very well. Stevens suggested that this has led to a strong jump over the prior period.
Stevens also revealed that capital raised this fiscal year is already in excess of what was raised in the full 2017 fiscal year. He said that this will see the first year-on-year increase for total capital raised since the fiscal year 2015.
ASX also saw futures volumes were up by 18 percent on pcp for the March quarter. He explained: The increasing number of customers connecting to ASX from offshore drove a significant portion of this. I spoke about this at the half-year result and it is good to see the continuing positive impact on activity levels.”
As for cash market trading, Stevens said the results were “pleasing” as equity volumes, so far this year, have been running below last year which has allowed ASX to “catch up a bit”.
Stevens also mentioned its “smaller but fast-growing” ASX collateral and ASX over-the-counter (OTC) clearing businesses. He said that ASX continues to see growth with ASX collateral balances up 102 percent and OTC clearing value up 37 percent year-to-date against pcp.
Steven revealed that all business revenue contributions are up on last year, and apart from equity post-trade, which has been impacted by slower equity volumes, the increases are greater than 5 percent.
According to Stevens, listings are up 13.6 percent with the business having a solid Q3 against a weaker pcp. He explained that results were helped by a “reasonable amount of secondaries in the quarter”.
He added: “Consistent with seasonal factors, initial listings were slow. But the pipeline remains healthy.”
Trading Services also continued to show good growth versus pcp with revenue for the nine months up 8.6 percent.
Stevens said: “Growth is being driven by new products and licensing in information services. Continued sales success in technical services is seeing an expansion in the ASX ecosystem and increasing utilisation of ALC and ASX Net as a preferred connectivity solution for the financial markets.”
He suggested that in cash market trading, the ASX market share remains solid, with weak turnover growth partially offset by the continued migration of trading to ASX Auctions at the start and close of each trading day.
Derivatives and OTC also showed strong momentum, rising 5.9 percent for the nine months.
March this year was a record month for futures volume, at 18.3 million contracts traded.
This contributed to a record for the January to March quarter, which is an unusual quarter for a record given that January is normally much quieter, according to Stevens.
He said: “The drivers were a combination of increased market volatility in both the rates and equity markets, and new market participants.”
As for equity post-trade, Stevens revealed that revenue is “generally flat” on last year, reflecting the overall flat equity trading volumes.
During a presentation at the 2018 Macquarie Australia Conference, suggested that the country's future growth will come from new products and services that leverage existing platforms, operational capabilities, its brand and its trusted independent position.
He said: “As such, we are accelerating our program to decommission older technologies and upgrade critical infrastructure to enable us to build new, contemporary products and services that will serve us, and the industry, for the next 20 years.”
Stevens also revealed that ASX’s results for the nine months to 31 March this year are up on the prior comparative period (pcp), which was helped by a very strong March quarter.
He noted that revenue was up 11.6 percent on the prior corresponding quarter and is now up 7.6 percent on pcp year-to-date.
Typically, our third fiscal quarter, which includes the traditionally quiet month of January, is a weaker quarter.
However, this year revenue held up very well. Stevens suggested that this has led to a strong jump over the prior period.
Stevens also revealed that capital raised this fiscal year is already in excess of what was raised in the full 2017 fiscal year. He said that this will see the first year-on-year increase for total capital raised since the fiscal year 2015.
ASX also saw futures volumes were up by 18 percent on pcp for the March quarter. He explained: The increasing number of customers connecting to ASX from offshore drove a significant portion of this. I spoke about this at the half-year result and it is good to see the continuing positive impact on activity levels.”
As for cash market trading, Stevens said the results were “pleasing” as equity volumes, so far this year, have been running below last year which has allowed ASX to “catch up a bit”.
Stevens also mentioned its “smaller but fast-growing” ASX collateral and ASX over-the-counter (OTC) clearing businesses. He said that ASX continues to see growth with ASX collateral balances up 102 percent and OTC clearing value up 37 percent year-to-date against pcp.
Steven revealed that all business revenue contributions are up on last year, and apart from equity post-trade, which has been impacted by slower equity volumes, the increases are greater than 5 percent.
According to Stevens, listings are up 13.6 percent with the business having a solid Q3 against a weaker pcp. He explained that results were helped by a “reasonable amount of secondaries in the quarter”.
He added: “Consistent with seasonal factors, initial listings were slow. But the pipeline remains healthy.”
Trading Services also continued to show good growth versus pcp with revenue for the nine months up 8.6 percent.
Stevens said: “Growth is being driven by new products and licensing in information services. Continued sales success in technical services is seeing an expansion in the ASX ecosystem and increasing utilisation of ALC and ASX Net as a preferred connectivity solution for the financial markets.”
He suggested that in cash market trading, the ASX market share remains solid, with weak turnover growth partially offset by the continued migration of trading to ASX Auctions at the start and close of each trading day.
Derivatives and OTC also showed strong momentum, rising 5.9 percent for the nine months.
March this year was a record month for futures volume, at 18.3 million contracts traded.
This contributed to a record for the January to March quarter, which is an unusual quarter for a record given that January is normally much quieter, according to Stevens.
He said: “The drivers were a combination of increased market volatility in both the rates and equity markets, and new market participants.”
As for equity post-trade, Stevens revealed that revenue is “generally flat” on last year, reflecting the overall flat equity trading volumes.
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