ASX is increasing its capital spending to modernize critical market infrastructure, as the struggling Australian stock operator seeks to regain the trust of regulators and stakeholders after years of technical problems.
According to a statement filed on Tuesday, the company raised its capital investment target to between 180 million and 200 million Australian dollars (between US$129 million and US$143 million) for the fiscal year beginning July 1. Previously, its target was between 160 and 180 million Australian dollars. Shares fell up to 10% in Sydney.
The Australian stock exchange is in the process of strategic rethinking following a regulatory investigation that revealed that its deficiencies in risk and regulatory compliance could have serious consequences for the country’s markets. As part of a series of commitments to the regulator, the exchange has agreed to reform its technological modernization program.
The company also forecast total expense growth of between 18% and 21% for the next fiscal year, and capital expenditure (capex) of between US$170 million and US$190 million for the following year.
Rising costs represent an additional challenge for the new CEO, Anthony Attiawho will take office in September. Attia He inherits a company that has suffered several delays in its efforts to modernize its markets infrastructure, especially with regard to its outdated clearing and settlement systems. This modernization is expected to be completed in 2029.
