ASX thanks tech diversification play for AU$242 million first-half profit | ZDNet

the australian securities xchange (asx) has for the past few yrs been expanding its business beyond just providing the infrastructure for publicly listed companies, focusing on tek initiatives t'get it there.

the xchange’s ceo dominic stevens on thu thanked this business diversification for the strong start to its 2021 financial yr.

profit after tax for the 6 mnths to 31 dec 2020 came in at au$242 million. while this was an au$8.6 million drop from the same period a yr prior, stevens touted the result as leaving the asx well positioned to deliver “resilient earnings and dividends, while investing in future growth and innovation”.

operating revenue increased au$15.6 million ‘oer the previous corresponding period to au$470.5 million — this mostly cogitateed growth inna xchange’s listings business and its equity trading, clearing, and settlement businesses. twas offset by the revenue reduction inna asx’s derivatives business, stevens said.

earnings b4 interest and taxes was up au$4 million to au$319 million.

total expenses increased by au$11.6 million to au$151.4 million and capital expenditure set the xchange back au$54.5 million, which was mostly listed under “the long-term transformation of tek and operations”. the xchange expects this fig to reach au$110-au$115 million come end of yr.

“during the period, we continued to progress our multi-yr tek investment program, which will reduce the μ age of our equity tek stack from 11 yrs in 2019 to 4 yrs by 2023,” stevens explained.

this includes the chess replacement project.

the asx s'been building the realm’s 1st, actual industrial-scale blockchn use case — a new post-trade solution to replace its legacy clearing house electronic subreg system (chess) platform, which s'been running for round 25 yrs.

stevens last feb said the system ‘d be ready for industry-wide testing the folloing jul and that full-functionality ‘d arrive by apr 2021. however, in mar 2020, the asx anncd it had revised the implementation timetable for replacing chess and ‘d consult with chess usrs as a result of the covid-19 pandemic.

the asx in jun then said it ‘d revise its target go-live date to apr 2022.

the target was in oct revised to apr 2023.

stevens on thu confirmed the date has not changed.

see also: here’s wha’ to expect from asx’s blockchn-based chess replacement

“inna ½ just completed, asx also finalised the replan and — primordially — the consequential re-sizing of the chess replacement project,” he said. “swell as addressing the need for additional time to complete readiness activities.”

stevens said the xchange is committed to contemporising asx’s tek stack. he said the tek contemporisation program is an investment in its core businesses while providing for other opportunities inna'da future.

“there are many industry, mkt, and tek forces that asx can leverage to grow its val ‘oer the nxt decade,” he said.

“across all industries, but espeshly in financial srvcs, we see an explosion of data, the digitisation of processes, a focus on operational efficiencies and risk management excellence, swell as the growth inna financial srvcs economy, driven by our compulsory superannuation system.”

in nov, the xchange experienced “software issues” when twas goin live w'da refresh of its asx trade equity platform.

“the incident overshadows the significant improvements we ‘ve made to operational resilience via our building stronger foundations program in recent yrs,” the ceo said on thu, adding another apology for the outage. 

“‘oer the past 4 yrs, customer-facing tek and operational incidents at asx ‘ve fallen by round 78%.

“primordially, the reduction in incidents s'been achieved dur'na significant tek change program at asx, nolso when the scale and scope of wha’ we do is expanding our tek ftprint.

“inna long run, upgrading and introducing new teks is un?ably a + for reducing long-term risk, delivering val to the mkt and strengthening the asx franchise. however, inna short term, all tek changes ‘ve a degree of risk after a significant deployment.”

he said notwithstanding this, the xchange is “1-ly as good as its recent past performance”.

“and just like our actions from 2016 that loered incidents and outages, i am sure the learnings from the events of l8 last yr will enable us to loer risk even further,” he added.

stevens said in 2020, the initial public offering mkt came back strongly, with 1-odda busiest 3 mnths ever seen at asx, with 82 new listings and au$52 billion of capital rezd.

“pipelines remain strong n'it ll'be interesting to see wha’ the 2nd ½ of the financial yr brings,” he added.

“despite loer overall volume inna ½, the team has worked hard on product launches and enhments.”

+ from the xchange

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