ASX ends on higher note despite corporate watchdog announcing court action over alleged misleading statements

Australia’s corporate watchdog sparked alarm in the markets after it announced court action against the ASX over alleged misleading statements.

The Australian share market ended on a higher note, buoyed by increasing health care, IT and real estate stocks despite investors being left spinning after the corporate watchdog’s shock announcement of court action over alleged misleading statements.

The ASX200 closed on Wednesday with a 0.3 per cent or 23.9 points to gain to 7850.7 points.

It follows the market making a third straight day of gains, when it closed up on Tuesday up 13 points at 7826.8 for a 0.17 per cent gain

The All Ordinaries Index also climbed 28 points to finish at 8070.2 as reporting season continued.

The ASX closed with a 0.3 per cent on Wednesday, despite ASIC announcing it was commencing court action against the operator over alleged misleading statements. Picture: NewsWire /Gaye Gerard

All but two sectors traded higher, with energy and materials down 0.21 and 1.76 per cent respectively.

The IT sector led the charge with a gain of 1.88 per cent, followed by health care on 1.87 per cent.

But investors were left spinning after the corporate watchdog announced it had commenced proceedings in the Federal Court against the ASX over alleged misleading statements relating to the operator’s Clearing House Electronic Subregister System (CHESS) replacement project.

The Australian Securities & Investments Commission (ASIC) alleges ASX statements back in February 2022 that the project remained “on-track for go-live” by April 2023 were misleading.

“ASIC alleges those representations were misleading and deceptive because, at the time of the announcements, the project was not tracking to plan and ASX did not have any reasonable basis to imply the project was on track to meet future milestones,” the regulator said in a statement on Wednesday.

ASIC alleges ASX Limited made misleading statements related to its Clearing House Electronic Subregister System (CHESS) replacement project, including that it would be operational by April 2023. Picture: NewsWire / Gaye Gerard

ASIC chair Joe Longo said the CHESS replacement was a technology project of fundamental significance and involved replacing infrastructure crucial to the operation of the Australian economy.

“Its critical importance was all the more reason ASX needed to ensure it told the Australian public the truth about how the project was tracking and whether it would be completed on time,” Mr Longo said.

“The delay and subsequent pause of the project in November 2022 caused significant cost to ASX and market participants who relied on assurances as to the progress of the project and scheduled go-live date.”

In response Helen Lofthouse, ASX managing director and chief executive, said: “We recognise the significance and serious nature of these proceedings.”

She added they co-operated fully with ASIC’s initial investigation were “carefully reviewing and considering” the allegations.

“We play a critical role at the centre of Australia’s financial markets, and continue to focus on supporting and delivering for customers,” Ms Lofthouse said in a statement.

“We are committed to taking ASX forward, and have made strong progress as an organisation over the past two years.

“ASX will keep the market informed in accordance with its continuous disclosure obligations.”

IT and health care were the highest trading sectors on Wednesday but energy giant AGL also reported a $711m statutory net profit in its full year earnings. Picture: iStock

Energy giant AGL reported a $711m statutory net profit and a final unfranked dividend of 35 cents per share – taking the total dividend for the financial year to 61 cents per share.

In their full year results, the company announced their underlying net profit after tax, excluding the movements in the fair value of financial instruments and significant items, was $812m.

It marks a rise of 189 per cent.

The total number of AGL customers rose by 211,000 to 4.5 million.

Damien Nicks, AGL managing director and chief executive, said more stable market conditions and high electricity prices drove the results.

“Margin growth also contributed to this result as we continued to drive value within our Customer Markets business,” he said.

Computershare’s full year results revealed the company’s management revenue was up 2.1 per cent to $3.3 billion.

The company posted a final unfranked dividend of 42 cents per share – up five per cent.

Chief executive Stuart Irving said Computershare was entering the new financial year with confidence, planning for lower interest rates which will impact margin income.

“However, with momentum in our core businesses, further recovery potential in our events businesses, the benefits of our hedging strategy, lower debt costs and cost savings, we expect further growth in earnings,” he said.

Earlier in the day, Commonwealth Bank revealed it recorded an eye-watering a $9.48bn profit – a six per cent slip compared to last year’s postings.

Full-year dividends for shareholders rose 15c to $4.65, fully franked, representing 79 per cent of its profits.

Arrears in expired fixed rate home loans with CBA jumped noticeably, up from 0.92 per cent to 1.3 per cent, though below the 15-year average of 1.38 per cent.

Home loans in 90-plus days of arrears have jumped from 0.47 per cent to 0.65 per cent, though sit level-par with the historical average, and a tick below 2019 levels.

Originally published as ASX ends on higher note despite corporate watchdog announcing court action over alleged misleading statements