Revenue for the period was $141.3 million, compared to $110.8 million for the previous corresponding nine months. The growth in revenue was driven primarily by increases in equities trading volumes, with total equity trades for the period reaching 10.3 million compared to 5.8 million for the previous corresponding nine month period. Trading volumes of options also increased, rising from 6.6 million for the nine months to 31 March 1999 to 7.5 million for the nine months to 31 March 2000.
As foreshadowed, average revenue per equity trade and per options contract for the period were lower than for the previous corresponding period, reflecting growth in the volume of lower value trades and ASX's commitment to set its fees at levels competitive with international best practice.
Market integrity remains a fundamental ASX objective. The increased number of trade volumes has also lead to an increased number of surveillance alerts. A number of these alerts result in queries to listed companies and a small proportion result in referrals to ASIC. In the 9 months to 31 March 2000, 83,700 surveillance alerts were processed compared with 88,589 alerts in the 1999 calendar year.
While equity trading volumes experienced for the year to date, and in particular those achieved in the third quarter, were significantly higher than for the previous corresponding nine months, the three months to 31 March 2000 were also significant in respect of the company's initiatives to develop international alliances and broaden and enhance its products and services.
During this period, ASX entered into an alliance with Standard & Poor's (S&P) under which S&P will operate ASX's index business. The agreement, which took effect from 3 April 2000, forms part of ASX's strategy to broaden its international alliances. ASX expects that an alliance with an internationally renowned company such as S&P will bring longer-term benefits to the company in terms of building awareness of the Australian market, attracting investment, and facilitating the development of ASX derivatives and Exchange Traded Fund businesses.
In addition, as part of ASX's focus on expanding the products and services it offers its customers, the company also announced its proposed joint venture with Perpetual Trustees Australia Limited concerning ASX Perpetual Registrars Limited.
While ASX is focused on broadening its revenue streams through diversification of products and services, revenue is currently largely driven by the levels of market activity. While over the last ten years equity trading volumes have been increasing by an average of 18.8 per cent per annum, over the short term they are inherently unpredictable. Although volumes can increase both when the market is rising or falling, historically it has been demonstrated that in circumstances of a flat market, trading volumes may decline.
Despite ASX's relatively high level of fixed costs, there is also a significant portion of costs that are directly related to volumes. As a result of the increase in volumes, coupled with additional technology expenses to provide increased capacity, costs are expected to be slightly higher in the second half. However, given the strong revenue increase in the third quarter, it is expected that the ratio of operating expenses to income for the second half of the year will be lower than for the first half of the year. As indicated at the time of the company's announcement of its results for the six months to 31 December 1999, the overall outlook for the full-year, while positive, remains largely dependent on the level of market activity for the remaining three months of the financial year.
