ASX extends decline, MS sees limited FY26 growth, higher costs

** Shares of Australia's ASX ASX fall as much as 2.1% to A$58.58, their lowest since June 27, 2024

** Morgan Stanley sees low-single-digit revenue growth in FY26 as the Australian capital market lags global trends

** Sees cost growth headwinds since ASX is expected to address concerns around the resourcing capacity to replace its clearance facilities, among other risks flagged by the central bank and financial markets regulator

** Shares closed 1.2% lower after RBA on Wednesday warned ASX to improve its clearing and settlement units

** Depreciation costs, and tendency for low cash generation vs net profit after tax, to add to cost upside - MS

** Adds regulators could examine ASX's return profile, which seems high for a company with monopoly-like characteristics

** YTD, stock down 9.4%