ASX GROUP MONTHLY ACTIVITY REPORT – APRIL 2016
The value of ASX-listed stocks, as measured by the All Ordinaries Index, rose 3.2% in April 2016. This performance was stronger than all major markets including Hong Kong up 1.4%, the UK up 1.1%, Germany up 0.7% and the US up 0.3%. Japan was down 0.6% and Singapore down 0.1%.
Volatility measures for the Australian equity market remained above long-term averages during April:
• Volatility (as measured by the average daily movement in the All Ordinaries Index) was 0.7% in April, consistent with the previous month.
• Expected future volatility (as measured by the S&P/ASX 200 VIX) rose in April to an average of 17.4 (compared to 17.1 in March).
Positive revenue growth of 7.0%
• Growth in all major categories compared to pcp supported by robust trading activity
• Impact of futures fee reductions $11.2m vs $10.5m pcp, continued growth in OTC clearing
• Lower average listings activity in the third quarter of FY16 compared to 1H16
Expense growth of 6.1%
• Acceleration of investment in post-trade services
• CEO transition arrangements
• FY16 guidance expense growth of approximately 6%
Capital expenditure $30.6 million
• FY16 guidance unchanged at approximately $50 million
• Q4 expenditure in line with scheduled technology transformation investments
ASX's financial performance for the nine months to 31 March 2016 was positive. Trading activity levels in cash and derivatives markets grew from the half-year, as did ASX's OTC clearing service with record activity levels in February 2016. Listings and capital raising activity was lower in the third quarter of FY16 compared to the first six months of the year. Overall, revenues were up 7% to almost $553 million and profit was up 6% to more than $317 million.
T+2 settlement of sharemarket trades was successfully introduced on 7 March 2016. The reduction in the settlement period from three to two days has provided efficiencies for investors and market participants, and kept Australia at the forefront of global best practice.
New listings for the month were JC International Group Limited (JCI), N1 Holdings Limited (N1H), Oneview Healthcare PLC (ONE), SMART ABS Series 2015-4E Trust (SXB) and Soon Mining Limited (SMG).
De-listings for the month were Cape Range Limited (CAG), Drillsearch Energy Limited (DLS), Equity Trustee Limited (EQT), Freehill Mining Limited (FHM), Global Resources Masters Fund Limited (GRF), IVS Holdings Ltd (IVS), Mazu Alliance Limited (MZU), Planet Platinum Limited (PPN), Riddock International Limited (RIL), Stirling Products Limited (STI) and UXA Resources Ltd (UXA).
The value of ASX-listed stocks, as measured by the All Ordinaries Index, rose 4.1% in March 2016. This performance was below the rise in Hong Kong up 8.7%, the US up 6.6%, Singapore up 6.5%, Germany up 5%, and Japan up 4.6%. The UK was up 1.3%.
Volatility measures for the Australian equity market remained above long-term averages during March:
Volatility (as measured by the average daily movement in the All Ordinaries Index) was 0.7% in March, down on the previous month (1.0%).
Expected future volatility (as measured by the S&P/ASX 200 VIX) fell in March to an average of 17.1 (compared to 23.7 in February).
ASX welcomes today's announcement by the Treasurer, the Hon Scott Morrison, that the Government is committed to putting in place the conditions needed for safe and effective competition in cash equities clearing. The concurrent relaxation of ownership restrictions on ASX was a recommendation of the Financial System Inquiry. The change to make ASX's ownership restrictions consistent with banks and insurance companies is appropriate given ASX's role in today's financial markets. The Treasurer retains important powers which can be exercised in the national interest.
ASX supports well-regulated, open and competitive financial markets.
The Treasurer's statement confirms that Australia's regulatory agencies will not recommend approval of any clearing licence applications until the conditions that support the Government's policy for safe and effective competition are established. ASX remains the sole provider of clearing services for cash equities in the meantime. ASX will also maintain its commitment to the Code of Practice that sets out how it manages its clearing and settlement infrastructure on behalf of the market. ASX has also announced that from 1 July 2016 its equities clearing fee will be cut by 10%
On 11 February 2016, ASX Limited (ASX) announced its half-year results for the six months to 31 December 2015 (1H16). Results were positive, with activity growth across all major areas. The listings market remained strong, with 77 new companies listing and almost $55 billion in IPO and secondary capital raised. Equity market activity was also stronger, with on-market value traded on ASX increasing 16.6% to more than $4 billion per day.
For the six months, profit after tax was $213.1 million, up 7.3% on the prior corresponding period (1H15). Based on the Group's segment reporting the key items were:
• Revenues $376.2 million, up 7.9%
• Expenses $85.1 million, up 4.4%
• Earnings per share 110.2 cents, up 7.3%.