'No longer a monopolistic asset': ASX takes hit after ASIC gives Cboe green light
Shares in the market operator sank to their lowest levels in more than 15 months, with fund managers warning the arrival of Cboe may further weaken the stock's appeal.
The Australian Securities and Investments Commission's (ASIC) approval for Cboe Australia to list new shares may further weaken the appeal of ASX Ltd itself to defensive-minded investors, even though it will take time before companies have enough confidence to choose the new player as the destination for their IPOs.
At least that's the view of Ten Cap Investments founder and lead portfolio manager Jun Bei Liu who has been active in shares of the market operator throughout the year.
Liu told Capital Brief that she shorted ASX in June as she felt it was an expensive defensive stock in light of the company's well documented ASIC problems, with analysts too bullish on it in her view.
At the time, Macquarie analysts had a ‘neutral’ rating on the stock with a price target of $66. The stock was down 1.36% on Tuesday to $58.06, its lowest levels in more than 15 months, on news of Cboe’s green light.
“This used to be a monopolistic asset and that's why people pay big price for very little growth. Even though the company has disappointed for many years, it continued to trade at a big premium,” Liu said.
