Stable market discount rates
Markets have experienced broadly positive performance over the last quarter, supported by rate cuts from central banks across major economies. This has been boosted by the extension of the US-China trade truce; however, uncertainty surrounding global trade policy remains a concern. With market conditions continuing to evolve rapidly, we have provided an update on our assessment of discount rates as at 30 September 2025.
The ASX200 ended the month of September 2025 higher than 30 June 2025. With an increase in the 10-year Commonwealth government bond yield being offset by higher earnings and growth expectations, no material change in the equity market risk premium (EMRP) for Australia has been observed. As a result, we have maintained our assessment of the EMRP at 4.75% as at 30 September 2025.
The impact of these changes on overall market discount rates is presented below.
Source: Leadenhall
“The recent interest rate cuts are expected to support spending by households and businesses, and growth in the Australian economy is expected to pick up a little further over the next year. The recovery in household consumption growth is forecast to be sustained as real incomes continue to grow. Since the August meeting, domestic data have been broadly in line with our expectations or if anything slightly stronger…”
With a slight increase in government bond yields and minimal movements in other discount rate components, overall market discount rates are now marginally higher compared to June 2025.
Companies should consider the impact the change in discount rates will have on their valuations, whether on their investment decisions or for impairment testing.
For further information on selecting an appropriate discount rate for your company please feel free to call us.
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Leadenhall has provided valuation expertise and advice for more than 30 years. We specialise in the valuation of businesses, companies and intangible assets as part of:
◆ Independent expert’s reports for listed and unlisted public companies
◆ Dispute resolution and shareholder determinations
◆ Financial reporting including impairment assessment, intangible assets and financial instruments
◆ Tax compliance
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