Is APRA’s Home Loan Cap and Regulatory Scrutiny Reshaping the Investment Case for ASX (ASX:ASX)?

• A recent rally on Wall Street lifted Australian stocks, while APRA revealed it will introduce a 20 percent cap on high debt-to-income home loans starting February next year to pre-emptively manage housing system risks.
• Meanwhile, Bendigo & Adelaide Bank identified shortcomings in its anti-money laundering controls, drawing regulatory scrutiny and contributing to weaker sentiment in the ASX Financial Sector.
• We'll explore how APRA's new home loan restrictions and heightened regulatory environment may reshape ASX's investment outlook going forward.

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ASX Investment Narrative Recap

To be a shareholder in ASX Limited, you need to believe in the company's long-term ability to drive recurring revenue growth through innovation in market infrastructure and data products, while maintaining its core role in the Australian financial system. The recent APRA home loan cap and regulatory scrutiny on financial institutions have not had a material direct impact on ASX’s current primary revenue catalysts, but the broader focus on compliance and governance heightens attention on regulatory risks for the exchange itself. Among recent company announcements, the June 2025 news that ASIC would commence a compliance assessment into ASX’s market licensee operations stands out. This directly ties into the most important risk for the business: higher regulatory scrutiny, which may require additional investment in risk management and could tighten revenue flexibility, especially if oversight intensifies in response to sector-wide events like Bendigo & Adelaide Bank’s recent compliance issues. However, actual costs and impacts from these assessments and potential new requirements remain an open question for investors who should be aware of the possibility that...

Read the full narrative on ASX (it's free!)

ASX is expected to deliver A$1.3 billion in revenue and A$547.2 million in earnings by 2028. This projection assumes an annual revenue growth rate of 4.9% and an increase in earnings of A$44.6 million from the current A$502.6 million.

Uncover how ASX's forecasts yield a A$65.00 fair value, a 12% upside to its current price.

Exploring Other Perspectives

Fair value estimates from 5 Simply Wall St Community members for ASX Limited span from as low as A$14.48 to as high as A$1,398.50. With regulatory scrutiny rising following ASIC’s compliance review, consider how these widely different outlooks reflect diverse confidence in the company’s ability to balance compliance costs with growth potential.

Explore 5 other fair value estimates on ASX - why the stock might be a potential multi-bagger!

Build Your Own ASX Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your ASX research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free ASX research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ASX's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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