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London Stock Exchange Better as Expected?

May 19, 2011 | About:

The London Stock Exchange (LSE) realized a big increase in earnings. The result strengthens the expansion plans of the LSE which plans to overtake the Canadian stock exchange TMX.

The LSE earned within the last fiscal year EUR 390 million, an increase of 22 percent compared to the previous year. Sales rose by seven percent to EUR 773 million, beating also the expectations of industry experts.

The LSE also announced it submitted an official request to buy the Toronto-based stock exchange TMX (TMXGF). The merger was agreed to in February 2011 when competitors Deutsche Boerse (DB1) and NYSE (NYX) announced a merger in order to create the world’s biggest capital market headquartered in Amsterdam. The LSE has steadily lost market shares within recent years in the UK market to new rivals such as Chi-X Europe and Bats Europe. Last month, the LSE's market share fell for the first time in its 210-year history below the 50 percent mark.

LSE chief Xavier Rolet told Reuters his company has a strong track record in bond trading as well as in exchange traded funds (ETFs) and derivatives. In addition, the London exchange noticed a positive effect from the sale of its technologies. This means that the initiated diversification, which had been announced two years ago, was followed by success.

Rolet’s most important move, however, is the proposed acquisition of Canada's TMX for three billion dollars. The acquisition should bring a huge number of commodity companies from Toronto to London.

Rating: 3.6/5 (10 votes)


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