May 26 (Reuters) – Australian stock exchange operator ASX warned on Tuesday of higher spending in 2027 to upgrade its technology and develop new products, sending its shares plunging more than 12% in their worst day since August 2012.
ASX said its total expenses would rise by up to 21% in 2027 relative to the previous year, with capital expenditure forecast raised to A$180 million-A$200 million ($128.97 million-$143.30 million) from A$160 million-A$180 million. In 2028, capital expenditure is expected between A$170 million and A$190 million.
Costs are set to rise sharply as the company upgrades its technology, invests in artificial intelligence, improves internal systems and automation, and bears the cost of running older and newer systems at the same time.
Spending is also increasing to meet regulatory requirements. The country’s securities regulator, the Australian Securities and Investments Commission, said in a report in April that it found a string of blunders, cost overruns and missed timetables for technology upgrades at the stock exchange operator.
The report stated the company had prioritised delivering higher shareholder returns, and adopted short-term “tactical solutions” to solving problems rather than addressing the cause of its issues.
“Final ASIC Inquiry Panel Report identified historical underinvestment compared to global peers, which ASX has committed to address with a faster pace and greater ambition,” ASX said in its statement on Tuesday.
The bourse operator’s 2026 total expense growth forecast of up to 23% includes costs associated with the regulatory inquiry.
ASX shares fell as much as 12.6% to A$51.40, marking their worst intraday session since early August 2012, compared with a marginal 0.4% drop in the benchmark , as of 0315 GMT.
The bourse operator reiterated its already trimmed dividend payout ratio of 75%-85% of underlying net profit after tax and said its unaudited revenue for the 10 months to April 30 was up 12.5% at A$1.03 billion.
($1 = 1.3957 Australian dollars)