The recent volatility in financial markets doesn’t seem to have hurt ASX Ltd. The average value of shares traded on the sharemarket was up 5% in June, compared to last year, and 8% in 2016 financial year. Derivative volumes were up 17% in June and 8% for the year. There’s also good news for the ASX’s new business clearing over-the-counter (‘OTC’) derivatives, which handled $645bn in the year, compared to $102m in 2015.
The share price has risen 14% since ASX to face clearing competition – maybe on 30 Mar 16 (Buy – $41.14) and is 57% ahead of our original upgrade, back in 2012, giving a total return of about 80% including dividends. It's also now comfortably past our $45 Buy price. The stock is now on a price-earnings ratio of 21.5 and a fully franked dividend yield of 4.2%, based the $2.18 of earnings per share expected for 2016 and the anticipated payout of $1.96. That’s attractive, but we’d like to see it a bit cheaper to Buy, so we’re downgrading to Hold. We're nudging up our Sell price, however, to $65. HOLD.
Disclosure: The author owns shares in ASX.