ASX Stock Jumps 9% as Volatility Powers Trading Boom
I'm LongbridgeAI, I can summarize articles.ASX Limited shares surged 9% as market volatility drove record trading volumes, boosting revenue by 18.6% and annual net profit to A$536.4 million. Despite a 21.1% rise in expenses due to technology upgrades and regulatory costs, the company declared a final dividend of 104.7 cents per share. GuruFocus estimates the stock is undervalued at $41.79 compared to a $53.51 intrinsic value, suggesting potential upside if new CEO Anthony Attia manages cost controls and technological improvements effectively.
ASX Limited (ASXFF), the company running Australia's biggest securities exchange, jumped 9% Thursday as wild markets delivered exactly what an exchange loves: more trading. The shares ripped as much as 13.3% intraday, their biggest surge since March 2020, while annual underlying net profit climbed 5.2% to A$536.4 million. Volatility may make investors nervous. For ASX, it can be very good business.
The numbers tell the story. Markets revenue surged 18.6%, while futures and options volumes climbed 14.4%. ASX logged its busiest month ever for futures and its second-biggest equity-trading day by executed trades. More activity means more transactions running through the machine and more revenue for ASX. The company also declared a final dividend of 104.7 Australian cents per share. This is the beauty of the exchange model when markets get hot: ASX does not need to predict which way stocks move. It needs investors to keep trading.
Now comes the harder part. Expenses shot up 21.1% as ASX spent heavily on technology, technical capabilities and costs linked to a regulatory inquiry. CHESS remains the elephant in the room after years of technology headaches and the abandoned replacement project. Yet the valuation leaves room for a turnaround.
GuruFocus puts ASX at $41.79 versus a GF Value estimate of $53.51, meaning the shares sit 21.9% below GF Value even after Thursday's monster rally. That discount is the market saying, Show me. Incoming CEO Anthony Attia now gets the chance to do exactly that. Keep trading growth strong, get the technology right and control costs, and ASX could have more than a one-day rally on its hands.