ASX Raises 2027 Expense Forecast, Shares Tumble

ASX Raises 2027 Expense Forecast, Shares Tumble

Australian stock exchange operator ASX raised its 2027 expense forecast by 18% to 21% on Tuesday, driven by technology spending, regulatory remediation, and growth investments. The news sent its shares towards their worst session since April 2000.

Reasons for Expense Increase

ASX is accelerating investment in technology modernisation, including upgrading key trading and settlement systems, and responding to regulatory inquiries. Operating expense growth, excluding depreciation and amortisation, is seen between 13% and 16% for the 2027 financial year. Capital expenditure forecast was raised to between A$180 million and A$200 million.

Market Reaction

Shares fell as much as 11.2%, heading for their worst session since April 2000, while the broader ASX200 index was down 0.5%. Investors are concerned about rising costs and regulatory pressures.

Regulatory Issues

In April, the Australian Securities and Investments Commission reported that ASX had prioritised delivering higher shareholder returns over ensuring critical market infrastructure. This followed a string of blunders, cost overruns, and missed timetables for technology upgrades.

Other Developments

ASX agreed to sell its 49% stake in settlement platform Sympli to partner ATI Group for a nominal amount, resulting in an after-tax loss of about A$12 million. Unaudited revenue for the year to April 30 rose 12.5% to A$1.03 billion.