ASX Ltd. shares declined after the company said embattled chief executive Helen Lofthouse will leave the role in May, without naming a successor as the Australian exchange grapples with challenges including a regulatory probe.
The stock fell as much as 6.3% on Wednesday, the most since Dec. 15, after the bourse announced her departure in a statement after market hours on Tuesday. A global search is underway to identify the next CEO, with internal candidates being considered, ASX said.
The planned exit of Lofthouse — the first female chief of the exchange — comes as ASX faces competition from Cboe Global Markets Inc. in listings, as well as a wide-ranging regulatory probe begun in June into the bourse’s governance and risk management practices. The inquiry’s final report is due to be delivered by March 31.
The resignation “is a little bit disappointing because we thought the company is already on track with starting its cost program and trying to work with regulators,” said Jun Bei Liu, co-founder and lead portfolio manager at Ten Cap Investment. Shares are likely to underperform as “there’s just a lot of uncertainty,” she added.
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ASX was hit with a capital charge of A$150 million ($106 million) from the Australian Securities & Investments Commission in December, amid a review stemming from a series of technical glitches and a long-stalled upgrade of its clearing and settlement system. The exchange operator last month increased its full-year expenses forecastBloomberg Terminal partly due to costs tied to the inquiry, and is due to release half-year results on Thursday.
On Dec. 1, the bourse experienced an hourslong technical outage that stopped company statements, adding pressure on Lofthouse and emboldening calls for accountability.
The shares of the stock exchange have slumped 14% over the past year, lagging the benchmark S&P/ASX 200 Index’s 1.4% gain. Shares of Singapore Exchange Ltd. and Cboe have risen more than 30% over the same time frame.
Lofthouse, who previously worked for UBS Group AG and JPMorgan Chase & Co., has spent more than a decade at ASX, becoming its chief executive in 2022.
Months after taking on the role, she called for a reassessment of a yearslong project to replace the bourse’s settlement and clearing platform with a blockchain-based system after reviews. The ambitious plan, which at the time was touted as a major win for the nascent technology, was beset with delays.
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