Bell Potter Analyst, Lafitani Sotiriou, has downgraded his recommendation of the ASX from a Hold to a Sell
Bell Potter Analyst, Lafitani Sotiriou, has downgraded his recommendation of the ASX from a Hold to a Sell. The downgrade is driven by our analysis which suggests derivatives revenue growth is becoming increasingly challenging. We see near-term risk to derivatives volumes largely driven by an expectation of a flat interest rate environment in Australia for 2014 leading to weak short-term futures volumes. In addition, all other core derivatives are displaying negative momentum, which will be better realised in the coming months. There are two other notable concerns on the horizon: the re-emergence of clearing competition, and the heightened focus in the US on High Frequency Traders. We have downgraded our earnings by 1.8% and 3.9% in FY14 and FY15 respectively. Following our changed estimates, our revised Price Target is $31.60 per share (previously $33.50). Detailed company research is available to clients via our website (VIEW LINK)