Pre-close period update

RNS Number : 5684Z

London Stock Exchange Group PLC

24 September 2009

 



24 September 2009

LONDON STOCK EXCHANGE GROUP plc

PRE-CLOSE PERIOD UPDATE

Unless otherwise stated, the following commentary refers to the five months ended 31 August 2009 and, where appropriate, to the corresponding period last year.  

London Stock Exchange Group plc ('the Group') today issued a routine update ahead of the close period relating to the six months ending 30 September 2009. 

Capital Markets 

• Money raised on the Group's markets during the period remained strong and broadly in-line with the amount raised last year at £43 billion, mainly comprising good levels of secondary issues in London with £30 billion raised 

• SETS average daily value traded declined 43 per cent year on year at £4.6 billion; trading volume at Borsa Italiana was up four per cent on last year at 262,000 trades per day

• The yield on UK cash equities trading in the period was 0.94 basis points of value traded.  A new tariff structure for the UK market was introduced at the start of September, re-balancing the charging between passive and aggressive trades, which together with new discounts is expected to reduce the yield by approximately 10 per cent (based on trading levels in the previous quarter)

• The Group's Derivatives operations saw overall contracts traded increase six per cent over the same period last year.  Volume on IDEM increased 17 per cent, following tariff changes designed to stimulate growth in trading volumes. EDX traded a similar number of contracts to prior year, with Russian contracts outnumbering Scandinavian trades for the first time

• On the Fixed Income markets, MTS Cash and Repo markets value traded were lower than last year by two and eight per cent respectively. Trading on Borsa Italiana's Electronic Bond and Government Securities Market MOT increased 36 per cent and value traded rose by 56 per cent

Post Trade

• Post Trade showed growth in all areas with increases of four per cent and 17 per cent in the level of equity and derivative clearing by CC&G for the five months; open interest also remained high at five million contracts

• Settlement instructions increased by 26 per cent and the Monte Titoli custody business remains robust, with a slight increase in value of assets under custody

Information & Technology Services

• In Information & Technology Services, demand for terminals taking real time data reduced to 94,000 professional users of LSE information (98,000 at end of June 2009), while professional terminals receiving Borsa Italiana data declined 3,000 to 142,000 in the same period

• Demand for other Information & Technology product lines remained good overall, with continued strength in SEDOL, Proquote and FTSE

Recent developments

In July we reported that consultation was underway to reduce headcount in the UK and Italy. The process is mostly complete, with 133 staff leaving the Group, representing 12 per cent of the total number of employees at the start of the year. This will provide expected cost savings of close to £11 million pa starting from the second half of this year, with a one-off exceptional cost to achieve the savings of £14 million to be taken in H1.  Review of all Group costs will continue.

Last week we announced an agreement to acquire MillenniumIT, a Sri Lanka-based technology services company.  MillenniumIT will provide the Group with a new, high performance trading platform and will generate at least £10 million pa of cost savings from FY2011-12.   Non-recurring incremental operating expenses of £25 million, representing accelerated depreciation of the current TradElect platform and expensing of current year upgrades, will be incurred in the current financial year of which £18.5 million will be taken in H1.  The acquisition is expected to complete in mid October.

Commenting on performance for the period, Xavier Rolet, Chief Executive said:

'Although market conditions remain challenging, the Group continues to see good levels of activity in many parts of the business. 

'We continue to take actions to ensure the Group is well placed to compete and develop. The acquisition of MillenniumIT is an exciting and important step, that will provide a more flexible, efficient and high performance trading platform.'

The Exchange expects to announce its Interim results for the six months ending 30 September 2009 on 25 November 2009.

Further information is available from:

London Stock Exchange	Patrick Humphris - Media	[phone]
	Luca Grassis ­- Media	[phone]
	Paul Froud - Investor Relations	[phone]
Citigate Dewe Rogerson	Patrick Donovan/ Grant Ringshaw/ Lucie Holloway	[phone]

Key Performance Indicators

Capital Markets - Primary Markets
	Five months ended
	31 August		Variance
	2009	2008	%
New Issues
Main Market, PSM & SFM	20	47	-57%
AIM	10	53	-81%
Blt	3	5	-40%
Total	33	105	-69%
Company Numbers (as at period end)
Main Market, PSM & SFM	1,515	1,588	-5%
AIM	1,365	1,626	-16%
Blt	295	306	-4%
Total	3,175	3,520	-10%
Market capitalisation (as at period end)
Main Market (UK only) (£bn)	1,571	1,676	-6%
AIM (£bn)	52	78	-33%
Borsa Italiana (€bn)	444	543	-18%
Borsa Italiana (£bn)	383	431	-11%
Total (£bn)	2,006	2,185	-8%
Money raised (£bn)
LSE New money raised	1.1	6.1	-82%
LSE Further money raised	30.1	32.2	-7%
Borsa Italiana new and further	11.3	3.5	223%
Total money raised	42.5	41.8	2%

Capital Markets - Secondary Markets
	Five months ended
	31 August		Variance
	2009	2008	%
Equity Volume Bargains (m)
LSE	65.8	74.1	-11%
Borsa Italiana	27.8	27.1	3%
Total	93.6	101.2	-8%
Equity Value Traded
LSE (£bn)	478	852	-44%
Borsa Italiana (€bn)	293	454	-35%
Borsa Italiana (£bn)	256	360	-29%
Total (£bn)	734	1,212	-39%
Equity Average Daily Bargains ('000)
LSE	633	700	-10%
Borsa Italiana	262	253	4%
Total	895	953	-6%
Equity Average Daily Value Traded
LSE (£bn)	4.6	8.0	-43%
Borsa Italiana (€bn)	2.8	4.2	-33%
Borsa Italiana (£bn)	2.4	3.4	-29%
Total (£bn)	7.0	11.4	-39%
Equity Average Bargain Size
LSE (£'000)	7.3	11.5	-37%
Borsa Italiana (€'000)	10.5	16.8	-38%
SETS Yield
Yield basis points	0.94	0.88	7%
Derivatives (contracts m)
EDX	24.8	24.9	0%
IDEM	18.3	15.6	17%
Total	43.1	40.5	6%
Fixed Income
MTS cash and Bondvision (€bn)	799	817	-2%
MTS money markets (€bn term adjusted)	14,201	15,461	-8%
Borsa Italiana MOT (€bn)	98	63	56%
Borsa Italiana MOT number of trades (m)	1.5	1.1	36%

Post Trade
	Five months ended
	31 August		Variance
	2009	2008	%
CC&G Clearing:
Equity Clearing (m)	28.8	27.6	4%
Derivative Clearing (m)	18.3	15.6	17%
Total Contracts (m)	47.1	43.2	9%
Open interest (m) (as at period end)	5.0	3.9	28%
Monte Titoli:
Settlement Instructions (m)	22.6	18.0	26%
Custody assets under management (€tn)	2.8	2.7	4%

Information & Technology Services
	31 August		Variance
	2009	2008	%
LSE Terminals
Professional - UK	38,000	44,500	-15%
Professional - International	56,000	66,500	-16%
Total	94,000	111,000	-15%
Borsa Italiana Professional Terminals	142,000	161,000	-12%
Proquote	5,100	4,400	16%
Borsa Italiana Market Connect	29,000	21,000	38%

 

END

 

 

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