ASX Targets $170M Capex and 8-11% Expense Growth in FY26

Strategic Progress Amid Market Evolution

ASX Limited’s 2025 Investor Forum presentation laid out a clear narrative of steady advancement in its ambitious five-year strategy. CEO Helen Lofthouse framed the exchange’s mission as powering a stronger economic future through a fair and dynamic marketplace, underpinned by technology modernization and enhanced operational resilience.

The forum underscored ASX’s commitment to embedding foundational improvements while accelerating growth initiatives, particularly in data and connectivity services. This dual focus aims to balance restoring market confidence with seizing structural tailwinds in capital formation and sustainability.

Technology Roadmap and Operational Resilience

Central to ASX’s strategy is the ongoing CHESS replacement project, a multi-year technology upgrade designed to enhance clearing, settlement, and registry functions. The first release targeting cash market clearing is slated for Q4 FY26, with full go-live planned for 2029. The roadmap also includes enhancements to derivatives and trading infrastructure, reflecting a broader push to modernize and secure the exchange’s technology platforms.

Operational risk management remains a priority, with ASX accelerating programs to uplift resilience and embed a risk-aware culture. The exchange acknowledged ongoing challenges, including legal proceedings initiated by ASIC related to past CHESS incidents, which continue to shape risk mitigation efforts.

Financial Discipline and Capital Allocation

From a financial perspective, ASX projects total expense growth of 8-11% in FY26, driven largely by technology investments and regulatory compliance costs. However, an operating expense efficiency program is expected to deliver approximately $17 million in annualized savings, helping to offset these pressures.

Capital expenditure guidance remains steady at $170-$180 million for FY25 and FY26, primarily supporting the technology modernization agenda. Depreciation and amortization are expected to rise in line with these investments, reflecting the long-term nature of the CHESS project’s asset life.

ASX’s strong balance sheet, with an AA- credit rating and flexible capital management framework, supports ongoing shareholder returns, including a dividend payout ratio target of 80-90% of underlying net profit after tax. The exchange aims to maintain an underlying return on equity between 13.0% and 14.5% over the medium term.

Market Activity and Growth Opportunities

Market activity remains robust, with ASX performing well against global peers in listings and capital raising. The exchange highlighted a healthy pipeline of new and upcoming listings across sectors such as healthcare, materials, and financial services. Initiatives to streamline the IPO process and reduce listing thresholds aim to enhance market attractiveness.

Growth prospects are anchored in expanding data and analytics offerings, leveraging ASX’s unique ecosystem to deliver high-quality insights and connectivity solutions. Sustainability-linked products and services also feature prominently, aligning with broader market trends and investor demand.

Looking Ahead

ASX’s Investor Forum presentation paints a picture of an exchange in transition, balancing the demands of modernization, regulatory scrutiny, and competitive positioning. While progress is evident, the path to fully realizing the five-year strategy will require continued focus on execution, risk management, and customer engagement.