Costs hold ASX back
January 18, 2008
This Sean Smith story appeared in The Herald Sun on October 30, 2001, after ASX AGM in Melbourne.
Higher costs dampened the impact of a kick in share trading on the Australian Stock Exchange in the September quarter, restricting profit.
The ASX said yesterday net earnings for the three months shed $200,000 from the same period last year to $13.2 million, despite revenues gaining $800,000 to $50.7 million.
The revenues were driven higher by a combination of a small increase in average daily trades – to 54,445 from 53,583 – and increased trade fees.
But they were offset by "short-term'' costs associated with funding for several initiatives, including the ASX's registrars joint venture with Perpetual Trustees.
Chairman Maurice Newman told the company's first annual meeting in Melbourne yesterday that while it was difficult to forecast activity in the market, the exchange looked forward "to another excellent performance'' this financial year.
He said the US attacks had shaken world equity markets and generated uncertainty, but the Australian share market was proving itself more resilient to such jolts than its Western counterparts.
Just as Australia "did not reach the heady heights of those irrationally exuberant days'' of the tech boom, "so I believe we will not plumb the same depths as the North American and other markets'', Mr Newman said.
The ASX's results this year should include a maiden profit from the Perpetual Trustees partnership, which lost $1.97 million in 2000-01, but a merger with the Sydney Futures Exchange is not on the cards.
Responding to a newspaper report that the two exchanges were discussing an amalgamation, the exchange said it "is now fully occupied pursuing its existing business strategy, which does not include acquisition of SFE''.
The annual meeting was a quiet affair but underlined the exchange's credentials as a standard-bearer for corporate Australia.
While bigger Australian companies, such as BHP Billiton, steadfastly adhere to an outdated notion that directors should be seen but not heard at annual meetings, the ASX requires that board candidates spell out their claims for office.
For the second year in a row, the ASX candidates were each given five minutes to address a clearly appreciative audience of mainly small shareholders.
The three directors standing for re-election to the nine-person board were easily returned.
The fourth candidate, shareholder activist Stephen Mayne, who appears to be finding increasing favour with small investors, failed in his second attempt to win a board seat but still won a creditable 7 per cent of the votes cast.
ASX shares finished 5 lower at $11.55.
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