ASX takes a jab at NSX: ‘you planning to make any money soon?’
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The ASX has formally asked the National Stock Exchange (NSX) whether it plans to start making any money soon.
The NSX was on the receiving end of an ASX query letter which pointedly asked how long the smaller exchange intended to have negative operating cash flows.
The NSX fired back saying that “as stated in the above mentioned quarterly report” they plan to maintain this situation as they’re restructuring into a more competitive business model.
It had negative cash flows of $1.1 million but only made $424,000 in receipts from customers – a sharp 75 per cent drop from $1.7 million in the October quarter.
The smaller exchange is trying to build a reputation as an alternative market to the ASX and has been investing in a new look — and booting companies which don’t fit the new ethos — as it nips on the heels of larger market.
The NSX had 83 listed companies by the end of 2017, after kicking off six during the quarter as a result of regulatory enforcement. The ASX had 2282.
The smaller exchange had $1.6 million in cash at the end of December and plans to spend almost all of it this quarter.
It expects the business to start making money “in the foreseeable future”.
The NSX says it has plenty of money that it can access if required and described just how good the revamped model will be once they’ve finished investing.
“There has been a substantial enhancement of the market operations, marketing, distribution model, technology platform and capabilities for the exchange as a result of the investments made over the last 18 months,” the market operator said.
“This has seen a significant improvement in the market positioning of the exchange and an enhancement in the commercial opportunities for the business.”