ASX, Asia-Pacific's second-biggest listed stock exchange, said on Thursday full-year net profit rose 46%, ahead of analysts' forecasts, helped by record equity trading volume.
ASX, which last year bought SFE Corp. to expand its derivatives business, reported net profit excluding items of A$313.1 million (US$257 million) for fiscal year ended June, up from a pro-forma profit of A$215 million a year ago, combining ASX and SFE.
When compared with ASX's standalone year-ago profit, growth stood at 128.5%. ASX gave no specific earnings guidance, but said the pipeline of new listings was healthy, especially in the minerals exploration sector, after a strong number of listings in 2006/07.
"Generally favorable economic conditions are conducive to an equally buoyant listings year ahead, particularly as any U.S.-exported credit squeeze will inevitably dampen some of the momentum of the private equity sector," Chief Executive Robert Elstone said in the group's annual report.
A record-setting market, strong flows into managed funds and a private-equity fuelled takeover boom boosted trading volumes on ASX. But recent volatility and a pull-back in stock markets have raised doubts about the outlook for companies which are heavily geared to the market performance.
Nine analysts on average had projected net profit of A$300.2 million. "Globally equity market volatility and shifts in interest rate sentiment in Australia, particularly in the second-half of FY07, triggered record trading levels in cash market as well as in the equity index and interest rate futures market," Elstone said in a statement.
"Cost reductions, including savings realized by ASX/SFE merger, have also contributed to the uplift in FY07 earnings," he added.
Trading volumes in underlying cash and derivatives markets had accelerated in the new fiscal year "in the wake of volatile equity markets and wider credit market spreads associated with contagion effects from the sub-prime mortgage sector in the U.S," Elstone added.
ASX shares ended Wednesday at A$45.00, having risen 18 percent in 2007 so far, easily outpacing a 2.1% rise in the benchmark S&P/ASX 200 Index in the same period. However, the stock is off about 13% from July's record closing high of A$51.71.
ASX's regional peers -- Hong Kong Exchanges and Clearing, Asia's top listed bourse, on Wednesday reported its best ever quarterly profit, while last month Singapore Exchange, reported strong profit growth on the back of swelling volumes.
ASX, which houses around 2,100 listed entities including the world's top two miners BHP Billiton and Rio Tinto, achieved a 35% rise in cash market trading value to A$1.3 billion.
Some 283 new companies listed on the exchange last fiscal year, while about A$78 billion was raised through initial public offers and secondary capital raisings.