Pre-Close Period Update

RNS Number : 3745E

London Stock Exchange Group PLC

26 September 2008

 



26 September 2008

PRE-CLOSE PERIOD UPDATE

London Stock Exchange Group plc

Unless otherwise stated, the following commentary refers to the 5 months ended 31 August 2008 and, where appropriate, to the corresponding period last year.  Figures for Borsa Italiana refer to the same time periods although the business has only been part of London Stock Exchange Group plc since 1 October 2007.

London Stock Exchange Group plc ('the Exchange') today issued a routine update ahead of the close period relating to the six months ending 30 September 2008. 

In summary, against a backdrop of testing market conditions, overall trading performance remains good:

• Average daily number of SETS trades increased strongly, up 27 per cent to 699,000, while average daily value traded was eight per cent down, a resilient performance in the context of the fall in the FTSE 100 which was on average 11 per cent lower compared with the corresponding period last year; trading at Borsa Italiana was down 13 per cent to 253,000 trades/day 

• Demand for professional terminals receiving LSE real time data remained firm at 111,000, up 9,000 over last year though slightly down since the first quarter; professional users of Borsa Italiana data were up 6,000 to 161,000, unchanged since Q1

• In Issuer Services there were 100 new issues in London and 5 in Italy, with the Exchange maintaining its leading position in international IPOs

Commenting on current trading and outlook, Clara Furse, Chief Executive, said:

'Trading volumes on SETS have continued to increase, illustrating the vitality of our central price forming order book.  The new tariff structure implemented at the start of September received strong positive feedback, and we continue to upgrade our trading platform with further planned enhancements to speed and capacity over the coming period.  Our Issuer Services division turned in a good performance despite testing market conditions for equity issuance, with over 100 new issues, including 25 international companies. In our Information businesses, demand for data from our UK and Italian markets remains robust.

'The overall resilient performance of our operations in highly uncertain market conditions, and our continued business development, position us well to meet the challenges and realise the opportunities ahead.'  

Issuer Services

Issuer Services has performed well for the year to date against a backdrop of testing market conditions for new issuance.  

	April - August
	2008	2007	Change
New Issues
Main Market, PSM & SFM	47	69	-32%
AIM	53	147	-64%
Blt	5	23	-78%
Total	105	239	-56%
Company Numbers (as at 31 August)
Main Market, PSM & SFM	1,588	1,623	-2%
AIM	1,626	1,685	-4%
Blt	306	304	1%
Total	3,520	3,612	-3%
Market capitalisation (as at 31 August)
Main Market (UK only) (£bn)	1,676	1,916	-13%
AIM (£bn)	78	102	-24%
BIt (€bn)	543	778	-30%

Although new issues are down year on year, the Exchange remains strong in terms of international IPOs, equivalent to the number on Nasdaq OMX and NYSE-Euronext combined.

In total, £41.8bn was raised on the Exchange's markets in the period, over 40 per cent up on last year (2007: £28.9bn).

Trading Services

Trading Services has delivered a good overall performance for the year to date, in particular with trading on SETS, the Exchange's electronic order book, demonstrating strong volume growth over the period.

	April - August
	2008	2007	Change
Equity Volume Bargains (m)
LSE	74.1	57.9	28%
BIt	27.1	30.8	-12%
Total	101.2	88.7	14%
Equity Value Traded
LSE (£bn)	852	918	-7%
BIt (€bn)	454	721	-37%
BIt (£bn)	360	489	-26%
Total £bn	1,212	1,341	-10%

	April - August
	2008	2007	Change
Equity Average Daily Bargains ('000)
LSE	699	551	27%
BIt	253	290	-13%
Total	952	841	13%
Equity Average Daily Value Traded
LSE (£bn)	8.0	8.7	-8%
BIt (€bn)	4.2	6.8	-38%
BIt (£bn)	3.4	4.6	-26%
Total £bn	11.4	13.3	-14%
Equity Average Bargain Size (£'000)
LSE (£'000)	11.5	15.9	-28%
BIt (€'000)	16.8	23.4	-28%
Derivatives (contracts m)
EDX	24.9	17.7	41%
IDEM	15.6	17.2	-9%
Total	40.5	34.9	16%
Fixed Income (Notional Val. Traded)
Borsa Italiana MOT (€bn)	63.5	61.8	3%
MTS (€tn)	8.5	9.4	-10%

The reduction in average daily value traded of eight per cent for LSE mainly reflects an average 11 per cent decline in the FTSE 100 over the same period last year, partly offset by the increase in trading volumes.

SETS yield per bargain reduced to £0.73 (2007: £1.00) generally mirroring the fall in the average SETS bargain size to £11,500.

Trading volumes at Borsa Italiana reduced 12 per cent over the period, in part reflecting a slowdown in retail investment which comprises a greater proportion of trading than in the London market, which saw trading volumes increase by 28 per cent. 

Information 

Information operations have performed well during the period, with resilient overall demand for real time price and trading data for both exchanges. 

	August
	2008	2007	Change
LSE Terminals
Professional	111,000	102,000	9%
Private	28,000	23,000	22%
Total	139,000	125,000	11%
BIt Terminals
DDM Professional	161,000	155,000	4%
DDM Private	829,000	719,000	15%
Total	990,000	874,000	13%

Professional users taking LSE data increased over last year, although at 111,000 the number represents a slight drop on the level for the first quarter (30 June 2008: 112,000). Professional users in Italy are unchanged since Q1.

Post Trade

Activity levels in the Post Trade operations, the Italian-based clearing, settlement and custody businesses, generally reflected the slowdown in trading for Italian cash equities and for fixed income trading at MTS during the period.

	April - August
	2008	2007	Change
CC&G Clearing:
Equity Clearing (m)	27.6	31.2	-12%
Derivative Clearing (m)	15.6	17.2	-9%
Total Contracts (m)	43.2	48.4	-11%
Open interest (m)	3.9	3.5	11%
Monte Titoli:
Settlement Instructions (m)	18.0	23.0	-22%
Custody assets under management (€tn)	2.75	2.82	-2%

Share Buyback Programme

Since the start of the financial year, the Exchange has bought back 5.9 million shares, for a total consideration of £51.5 million.  The number of ordinary shares in issue stands at 270,519,018.

Current Trading and Prospects

Volume growth on SETS has continued into September, and value traded has also increased markedly, in part reflecting market volatility and also the beneficial effects of the new tariff structure. The migration of Italian cash equities trading at Borsa Italiana to the TradElect platform takes place next month, which should facilitate higher levels of trading in this market.  

The Exchange is making good progress with the integration of Borsa Italiana, and overall remains well positioned to meet the challenges and realise the opportunities ahead.

The Exchange expects to announce its Interim results for the six months ending 30 September 2008 on 13 November 2008.

Further information is available from:

London Stock Exchange	Alessandro Pavesi - Media	[phone]
	Patrick Humphris - Media	[phone]
	Paul Froud - Investor Relations	[phone]
Finsbury	Alex Simmons	[phone]

 

END

 

 

MSCUVOBRWORKUAR