I am Rick Holliday-Smith, the Chairman of ASX.
From my far right we have directors Ken Henry, Melinda Conrad, Peter Marriott and Heather Ridout.
On my left we have our General Counsel and Company Secretary Amanda Harkness, our Managing Director
and CEO Dominic Stevens, and then directors Peter Warne, Yasmin Allen and Damian Roche.
2016 was another strong year for ASX. Your company achieved record financial performance and we
continued to invest in innovation, improve our service to customers and strengthen our competitiveness.
As you all know it's also been a year of renewal, with the appointment of Dominic Stevens as ASX's new
Managing Director and CEO.
Dear ASX Shareholder
On 18 August 2016, ASX Limited (ASX) announced a strong full-year
result for the 12 months to 30 June 2016 (FY16). There was growth in all
key business areas, supported by higher activity levels and continued
business initiatives that give customers greater choice and control.
Market activity was driven by a rise in secondary capital raisings,
particularly within the financial sector, and heightened volatility in
interest rate markets, culminating with the surprise of Brexit. The
average value traded on ASX's equity market rose almost 10% to $4.2
billion per day, futures and options turnover grew more than 8% across
the period, and there were 124 new listings, the most in five years.
IRESS Limited yesterday announced an $85 million institutional share placement to fund the acquisition of Financial Synergy, a provider of software to the Australian superannuation industry.
Completion of the share placement bookbuild was announced earlier today. ASX is acquiring approximately 1.4 million shares for consideration of $16.2 million at the placement price of $11.35 per share. ASX's shareholding in IRESS is 19.1%.
The value of ASX-listed stocks, as measured by the All Ordinaries Index, fell 2.0% in August 2016. This performance was in contrast to some major markets, including Hong Kong up 5.0%, Germany up 2.5%, Japan up 1.9% and the UK up 0.8%. Declines were also observed in Singapore, down 1.7% and the US down 0.1%.
Volatility measures for the Australian equity market fell below long-term averages during August:
• Volatility (as measured by the average daily movement in the All Ordinaries Index) was 0.4% in August, down on the previous month (0.5%).
• Expected future volatility (as measured by the S&P/ASX 200 VIX) fell in August to an average of 13.2 (compared to 16.3 in July).
ASX operates at the heart of Australia's financial markets. It is among the world's top 10 exchange groups and is the global leader in A$ and NZ$ financial markets.
More information about ASX can be found at www.asx.com.au
We are a fully integrated exchange across multiple asset classes –
equities, fixed income, commodities and energy.
We service retail, institutional and corporate customers directly and through Australian and international intermediaries.
We provide services that allow our customers to invest, trade and manage risk. These include listings, trading cash and derivatives, post-trade services, and information and technical services.
We operate and invest in the infrastructure that promotes the stability and development of Australia's financial markets and is critical for the efficient functioning of the nation's economy and position in the Asia Pacific region.
We advocate for regulations that support end-investors, promote the growth and integrity of the market, and strengthen Australia's global competitiveness.
•Revenue up $45.6 million
•Growth in all business lines underpinned by higher trading activity and robust capital raisings
•Expenses up $10.5 million
•EBITDA up $35.1 million, increase of 6.5%, NPAT and DPS up 5.7%
Continued strategic technology investment
•Futures trading platform, risk management and post-trade development in FY17
•Distributed ledger technology for cash market clearing and settlement
•Investment in Digital Asset Holdings
•Opportunity for post-trade innovation
•Capital expenditure $50.2million
Mr Rick Holliday-Smith, ASX Chairman, said: "ASX delivered strong financial results in FY16, with growth in all key business areas, supported by higher market activity. This was driven by a rise in secondary capital raisings within the financial sector and increased trading activity due to heightened volatility, particularly in the second half of the year, culminating in the surprise of Brexit. Revenue was up 6.5% to $746.3 million and profit after tax rose 5.7% to $426.2 million.
"ASX continued to invest in the infrastructure critical to Australia's financial markets throughout the period. This included successfully introducing T+2 settlement, significant progress on the delivery of a new futures trading platform, and the assessment of distributed ledger technology or 'blockchain' as a potential post-trade solution for the equity market. These initiatives aim to improve market efficiency and reduce risk and complexity for investors, intermediaries and other market stakeholders. They help keep Australia at the forefront globally of innovative market developments.
"On 1 August 2016 ASX welcomed Dominic Stevens as the company's new Managing Director and CEO. He is an experienced and highly-regarded industry leader, ideally qualified to build on ASX's achievements. Having been a past CEO and served on the ASX Board, Dominic has a good understanding of the challenges and opportunities ahead of ASX, as well as the complex global regulatory environment in which we operate."