ASX Limited Remains Overvalued Despite Strong Fiscal 2020 Result

We have maintained our fair value estimate for wide-moat ASX Limited at AUD 59.00 per share following its strong fiscal 2020 financial result. The 9% increase in revenue was better than our 6% forecast and reflected strong growth across the business, particularly from cash equity trading and secondary capital raisings due to coronavirus-related market volatility in the second half. However, second-half volatility and trading volumes were the highest they’ve ever been and we expect a normalisation of markets and weaker revenue in fiscal 2021, despite a likely resurgence of IPOs.