Transcription of Finance News Network Interview with ASX Limited (ASX:ASX) Managing Director and CEO, Elmer Funke KupperLelde Smits: Joining me from ASX Limited
(ASX:ASX), the operator of the Australian Securities Exchange, is its Managing Director and CEO,
Elmer Funke Kupper. Elmer welcome.
Elmer Funke Kupper: Thank you.
Lelde Smits: How do you believe ASX is positioned in the global marketplace?
Elmer Funke Kupper: We are the eighth largest listed exchange group in the world. So we rank up there with some of the best and largest in the world. And that’s a function of the Australian marketplace which is a very attractive place, as well as our business model. We are a fully integrated exchange doing everything that an exchange can do for a list of companies and investors.
Lelde Smits: ASX has just released its Fiscal 2014 financial year results. What were the highlights?
Elmer Funke Kupper: We had a very positive result last year; revenue is up 6.6 per cent, earnings up 10 per cent. But importantly, we delivered a number of investments that positioned the Company better, in what is a very rapidly changing world of financial markets.
Lelde Smits: How much capital was raised on the exchange last year and how many new listings did you attract?
Elmer Funke Kupper: Last year we did about 107 new listings, so that’s about two a week. So that’s a very strong IPO market. They raised about $28 billion which is again, a very strong number. In total, the Company raised over $60 billion in both IPO capital and secondary capital raisings.
Lelde Smits: ASX has increased its full year payout to $1.78 cents per share. What payout ratio does that represent?
Elmer Funke Kupper: We have a history of paying out 90 per cent of our earnings in dividends, and we did that again in 2014. We think it’s really important that the strong cash generation that we produce as an Exchange, gets delivered back to dividends, to shareholders in dividends.
Lelde Smits: The Company has recently lowered fees for clearing participants in your interest rate futures and over-the-counter clearing business. What was the motivation behind the move?
Elmer Funke Kupper: We lowered our fees in our derivatives business, that’s about a third of the Company. And the reason we did it is after 10 years of very strong growth, we felt it was important to give something back to our clients. And, also to put in place a fee structure that incentivises them to grow the business even further and we hope that we’ve achieved both of those.
Lelde Smits: Despite equity gains volumes are at five-year lows. What do you put this down to and what will it take to increase volumes?
Elmer Funke Kupper: When we look at our businesses in the Company, growth was between two per cent and 11 per cent. The lower number was our equity business. So, it grew a little bit for the first time in some years, so that’s a positive. But, of course we would like to grow more. I think what it will take is more retail investors and more investors coming back to the market, to trade their portfolios. They’ve been doing very well on the back of the rising indices and that’s a positive. But we think as volatility starts to return, we might see some more trading volumes going forward.
Lelde Smits: Finally Elmer, what are ASX’s main priorities over the current 2015 financial year?
Elmer Funke Kupper: As I said at the beginning, we are one of the top ten exchanges in the world. We are the leader in anything to do with the Australian dollar financial markets. We will continue to invest in our business to build that leadership position, and give a much broader choice of investment options to Australian investors. And finally, we will continue to advocate a regulatory environment that supports the quality of our financial markets, which is amongst the best in the world.
Lelde Smits: Elmer Funke Kupper, thank you for the update from ASX.
Elmer Funke Kupper: Pleasure.
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