ASX

Interesting to see ASX (the big exchange operator) squeaks in (albeit at the top end) of their FY24 cost guidance.

Back at the half year, mgmt guided to “a fall in the second half expenses” that the analyst community was quite skeptical of (see below exchange, from Feb).

Still, it is a a lot of words, and mgmt are difficult to pin down for a clear translation into EBIT, which is what we care about. All we have to go on in terms of hard numbers is the cost guidance, and here FY25 feels like choose your own adventure, regarding D&A, and just what is or isn’t a one-off.

4-7% if hit is clearly a good outcome, but still think they’ve gotta go harder, most notably on headcount.

Overall, top end outcomes for cost and capex are not going to alleviate (the bears) worries in the short to medium run. Expectations were quite low coming into today, and there are lots of different stakeholder optics to manage here, which limit the ASX’s ability to talk up revenues in growth (growing) markets.

There has been an uplift in interest rates, which is good for the net interest income the ASX generates, and there’s been an increasing in futures market activity (rates, energy) and the future, assuming ASX delivers the CHESS replacement on time, and continues to make nice with the regulator, should be good.

Update, this was interesting, the Citi comment written pre-market open “costs as expected, doesn’t expect the investor day to move the share price much”. We thought a bearish interpretation might take the stock down 3-4%, certainly weren’t expect it to open down 10% (slight recovery since, but very marginal).

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