sfe- comments made today. very positive from what

I am pleased to report that trading volumes for the first four months of 2004 have continued to be
at record levels (up 34% over the comparable four months of 2003 and an even more impressive
54% over the comparable four months of 2002). SFE management cannot claim that this growth
has been entirely due to its own efforts: high levels of volume growth have been a world-wide
phenomenon in derivatives exchanges in recent times. However, we can say that
• SFE has successfully developed and maintained systems which can accommodate the
extraordinary growth,
• The systems have been very robust and have exhibited a high level of uptime, and
• They incorporate a high degree of surplus capacity which allowed SFE to process the peak
volumes, including the record day in March when over 900,000 contracts were traded.
In addition, it would be unduly modest to suggest that SFE’s significant marketing and business
development efforts, including the facilitation of offshore trading links, have had no impact on the
volume growth that we have experienced.
There are a number of factors driving these growth rates, some of which are global (or secular)
and some of which are localised to the fortunes of the Australian currency, interest differentials
between Australia and other developed economies, and the scale of foreign issuance of A$ fixed
income securities impacting the swap market’s hedging requirements. SFE continues to play a
pivotal role in facilitating exposure management of domestic asset portfolios of banks and fund
managers as well as capital inflows from foreign investors.
Against the backdrop of these forces management has sought to extend SFE’s global distribution,
list new products, improve service levels and tightly control costs at the same time as absorbing
additional regulatory obligations arising from recent legislation enforced by ASIC and the RBA.
Since the release of SFE’s Annual Report on March 3rd, 2004 NZ$ denominated derivative
contracts previously operated by the wholly owned NZFOE have migrated (operationally) onto the
Sydney Futures Exchange by way of a prelude to new (NZ$) equity index contracts and equity
options being listed on the Sydney Futures Exchange (and cleared by SFE Clearing Corporation)
on behalf of the New Zealand Stock Exchange (NZX).