The new ASX guidelines may discourage companies from making earnings predictions public

The proposed changes to the guidelines for listed companies on their continuous disclosure obligations (ASX Guidance Note 8) will provide greater clarity and a more pragmatic approach for companies that find themselves facing a sudden change in their profit expectations and want to know if or when they should inform the market.

However, a different, more rigorous standard will apply under the guidelines if a company is in the habit of giving regular earnings guidance.

We believe that the new standard will force companies to re-assess whether they should continue giving that guidance and may well actively discourage them from providing any guidance at all, even if they believe they have reasonable grounds for doing so.