BUZZ-JPM, Macquarie "neutral" on ASX, flag risks from ASIC proceedings and expenses

Reuters10-08

(Updates with Macquarie comments)

** Shares of bourse operator ASX down 0.5% to A$65.7 at 0406 GMT

** Analysts at J.P. Morgan keep "neutral" rating on stock, believing earnings upside is short-term and could be hurt by potential penalty from Australian Securities & Investments Commission (ASIC) proceedings

** Macquarie also maintains "neutral" reflecting medium-term opex and capex concerns

** JPM upgrades FY25 NPAT forecast by 4.2%, reflecting strong trends in derivatives volumes and slightly better than expected recovery in cash markets

** Macquarie cuts FY25 earnings estimate by 4.0%, pushing opex growth to top end of guidance range

** JPM says there will be heightened regulatory scrutiny in the medium term, given recent timeline of events

** Whilst ASX's new expense and capex guidance covers base case scenarios for current regulatory scrutiny, we think there can be a possibility of a material penalty — JPM

** Stock has risen 4.2% YTD, underperforming 7.7% gains in the ASX 200 benchmark

(Reporting by Himanshi Akhand and Sneha Kumar in Bengaluru)

((Himanshi.Akhand@thomsonreuters.com))

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