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 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

+44 (0) 20 7797 1222


Luca Grassis ­- Media

+39 02 72426 211 


Paul Froud - Investor Relations

+44 (0) 20 7797 3322




Citigate Dewe Rogerson


Patrick Donovan/ Grant Ringshaw/ Lucie Holloway


+44 (0) 20 7638 9571





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%



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