AGM Statement

London Stock Exchange Group PLC
11 July 2007

                        LONDON STOCK EXCHANGE GROUP PLC



                             Annual General Meeting



                             Wednesday 11 July 2007



                   Chairman's statement by Chris Gibson-Smith





Before moving to the formal business of the AGM, I would like to take the
opportunity to talk about the prospects for your company.



Your Board has held clear and consistent views about the value of your company
and we took great confidence from the outcome of the takeover approach from
NASDAQ. The overwhelming majority of our shareholders endorsed the Board's view
of the inadequate value of the offer and of the inherent qualities of the
business, our unique strategic position, and exciting growth prospects. Very
strong performance across the business continues to highlight London's central
role in the future development of global equity markets, as our offer for Borsa
Italiana demonstrates - I will talk more about that shortly.



During the year your company has passed a number of significant milestones on
the path to becoming the world's capital market. We have consolidated our
position as the primary centre for capital raising by international companies
while electronic trading volumes have grown faster than those on all other major
cash equity and derivatives exchanges.



In the primary market we have again shown our ability to use our global brand
and to capitalise on our unique strategic position at the heart of the City of
London.  A total of £54 billion was raised on our primary markets last year, £29
billion in IPOs - more than any other equity exchange in the world and more than
NASDAQ and NYSE combined.



As international issuers look for new sources of capital, our markets are their
natural choice. The London Stock Exchange is central to the international
character of the City of London and London's leading position is ever more
widely recognised with the 2007 Global Financial Centres Index, ranking it ahead
of the rest of the world.



Our secondary markets business is also becoming increasingly international as
our network grows in scale and value, with more member firms from more countries
than ever before. Our customers are at the forefront of the revolution in
technology, and connectivity now links markets in milliseconds.  As a result of
our investment in new technology and our increasingly efficient electronic order
book we are driving ever greater trading volumes on SETS as we facilitate the
structural shift in equity trading.



For example, TradElect our new trading platform that went live in June, has
delivered a step change in trade execution latency from 140 milliseconds to
around 10, even during periods of high load. This will stimulate more high
velocity and electronically-managed trading strategies that are increasingly
being used by new customer groups, such as hedge funds and specialist
intermediaries.  The efficiency of our execution venue can be measured by the 89
per cent fall in FTSE100 spreads since 2000 and by the average of 4p we charge
to trade £1000 worth of shares. This has helped drive electronic trading which
last year grew by 58 per cent to average 353,000 SETS bargains per day. The rate
of growth has continued beyond the year end and in June we reached 536,000
bargains per day. To put that in perspective, average daily SETS bargains in
June 2005, only two years ago, were just 187,000.



This rapid growth of our primary and secondary markets, facilitated by new
technology, is driving very strong revenue growth, up by 20 per cent last year.
Adjusted basic earnings per share, excluding exceptional items rose by 50 per
cent. These revenues, combined with a reduction in costs have enabled your
company to create exceptional value for shareholders.



As we forecast in our January circular, our final dividend will be 12 pence per
share - taking the total to 18 pence per share for the year, an increase of 50
per cent.



We continue to review our capital position and to make returns as appropriate in
order to enhance the efficiency of our capital structure. Returns already made
or announced amount to £974 million since 2004 - 36 per cent of current market
capitalisation.



Your Board is totally focused on continuing to deliver strong performance which
will increase value for shareholders. While we were defending the series of
inadequate offers for your company we were evaluating a range of opportunities
that would deliver a better return for shareholders. In Borsa Italiana we have a
deal that is highly complementary and one that adds considerable value for both
our customers and our shareholders.



•   We expect the deal to be earnings neutral to positive in FY 2008
    and accretive by at least 10 per cent in FY 2009; and we expect cost 
    synergies of £20m as well as revenue synergies of £20m.



•   The merger offers diversification into other asset classes and
    geographies. The combined group will be first in Europe by number of listed
    companies; first by value and number of order book trades; first by wholesale
    electronic bond trading and first for electronic trading of Exchange Traded
    Funds and securitised derivatives. It will create a new force in European fixed
    income markets through Borsa Italiana's interest in MTS - on which Italian and
    other bonds are already traded and we will build on the strong position in
    derivatives products which they bring to the combined group.



•   And it's a tremendous story for the Italian equity market. The
    resulting enlarged equity liquidity pool will contribute to growth in trading
    and encourage further new issuers to both markets; and we expect to see
    acceleration of algorithmic and proprietary trading in Italian equities, as we
    have in London, by the introduction of our new trading platform.



Customers will benefit from the continuing lower cost of trading and the
increase in liquidity will reduce the cost of capital for issuers. Market users
will also benefit from increased access to a wider range of products and
services, with reductions in costs, risks and complexity. In the post MiFID
environment this will further enhance our already strong competitive position.



Your Board believes that it is an excellent deal for shareholders. It delivers
substantial benefits for users of the London market and it strengthens the
strategic position of the enlarged group, enhancing its attractiveness as the
partner of choice as the industry continues to consolidate. You will have the
opportunity to vote on the proposal at an Extraordinary General Meeting in
August 2007.



In the meantime, we have made an excellent start to the new financial year, with
growth continuing where it left off at the end of last year.  Turnover for the
three months ended 30 June 2007 increased 19 per cent to £100 million.  This
very strong performance was driven by continued growth in our Broker Services
division and an excellent start to the year in Issuer Services and Information
Services business areas.



Order book trading has continued to set records in the first quarter driving
Broker Services' turnover up 18 per cent.  Daily average trading on SETS was 51
per cent up, taking volumes above the target we set for the year.



New issues have been very strong with money raised on the exchange's markets
achieving a new record for the first quarter of £10.2 billion, up 117 per cent,
ahead of our major rivals, yet again; and the number of terminals taking real
time data was up 10,000 on the same period last year.



So, our excellent organic growth story continues, now with the addition of a
compelling consolidation opportunity.   Your company is taking ever more
significant steps towards our goal of becoming the world's capital market and we
are increasingly well positioned in the rapidly evolving global exchanges
sector.





Further information is available from:


London Stock Exchange     Patrick Humphris - Media                 020 7797 1222
                          Paul Froud - Investor Relations          020 7797 3322
Finsbury                  James Murgatroyd                         020 7251 3801




                      This information is provided by RNS
            The company news service from the London Stock Exchange