ASX shares crash 10% as technology costs blow out again
Synopsis
ASX shares slid after the exchange operator raised technology spending and capital expenditure forecasts linked to its delayed CHESS replacement project and infrastructure upgrades. The company maintained FY26 guidance and reported stronger trading-driven revenue growth, but investors reacted to rising costs and lower projected returns amid ongoing regulatory scrutiny.
ASX shares fell sharply after the exchange operator increased technology spending forecasts tied to the CHESS replacement project, despite reporting stronger revenue growth from higher trading and derivatives activity.
Key Highlights
- ASX shares dropped over 10% after higher FY27 spending guidance.
- FY27 capex guidance increased to between A$180 million and A$200 million.
- ASX reported A$1.03 billion revenue for the 10 months through April.
- CHESS replacement and infrastructure resilience projects remain key investor focus areas.
ASX shares have plunged over 10% on following the exchange operator's upgrade of its spending outlook linked to its long-running CHESS replacement project and wider infrastructure upgrades.
The firm's operating costs are projected to increase by 18%-21% for FY27, while its capex is now slated at A$180 million to A$200 million, the company said. The previous forecast range was between AUD$160 million and AUD$180 million.
The move raised investor worries over risks to technology implementation at one of the region's top exchanges, given that several other global exchanges have suffered outages and regulatory investigations in recent years.
Delays are back on the agenda at CHESS
Again the update highlights the long-running saga of ASX's CHESS replacement program, which has had several delays since 2022 when the company cancelled a rebuild using the blockchain.
In past reviews, the Australian Securities and Investments Commission (ASIC) and the Reserve Bank of Australia (RBA) have raised concerns about the governance and operational issues associated with this failed rollout that have been addressed by ASX. The exchange subsequently promised to reconstruct the system with another technology architecture.
Current spending will be helping to fund settlement systems, cloud migration, cyber security, automation tools and operational resilience programs, ASX said.
Revenue Growth Overshadowed
The company has also revised down its ASX share price but kept its FY26 guidance and has reported unaudited operating revenue of A$1.03 billion in the 10 months to 30 April, rising 12.5% year-on-year.
Trading volume and derivatives trading did not lag behind during the period, especially in response to uncertainty in interest rates in the world and volatile equity markets.
ASX also reduced its medium-term ROE guidance to 12%-14%. The expected dividend payouts will be in the lower half of the company's dividend payout range for the subsequent two reporting periods.
Exchanges Spending More on Resilience
In the wake of recent global trading disturbances, more exchange operators are undertaking increased technology investments.
The Nasdaq's market outages investigations, the Stock Exchange in London's migration to a new platform, and new cyber security-related regulations in financial markets have spurred exchanges to invest more in infrastructure reliability and trade settlement systems.
The report Global Capital Markets Infrastructure Outlook 2025 published by Deloitte predicts that exchange operators across the world will invest more in their cloud systems, cyber security and post trade infrastructure as regulators are becoming more stringent in their operational requirements.
In the last two years, companies such as Nasdaq, the London Stock Exchange Group and the Singapore Exchange have ramped up their technology spending initiatives.
FAQs
Q1. Why did ASX shares fall sharply?
ASX shares dropped after the exchange operator raised its spending and capital expenditure forecasts for technology and infrastructure upgrades.
Q2. What is the ASX CHESS replacement project?
The CHESS replacement project is ASX’s effort to rebuild its clearing and settlement system used for Australian share transactions.
Q3. How much is ASX planning to spend on technology upgrades?
ASX expects FY27 capital expenditure to range between A$180 million and A$200 million, mainly for infrastructure and system upgrades.
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
