FTSE Russell drives profits at LSE

Information services’ revenues increased 17% in 2016, with growth across data and the FTSE Russell indexes.

The London Stock Exchange (LSE) saw a 14% surge in revenues driven by its information services and in particular the FTSE Russell business.

The information services segment - consisting of real time data services, reporting and reconciliation and the FTSE Russell indexes - reported a 15% increase in sales in 2016 compared to the year prior. 

Strong subscription sales and a growth in index products saw the FTSE Russell indexes revenues increase 7% to £409 million.

In November, the LSE announced an agreement to purchase 100% of the issued share capital of financial information provider Mergent.

Mergent now forms part of LSE’s information services business and supports the growth of FTSE Russell’s index offering by supplying data and analytics for the creation of further indices.

Mark Makepeace, group director of information services and chief executive officer of FTSE Russell, said at the time the acquisition will “broaden our range of data services, research and analytics to meet the increasing demands of our clients for benchmarks and related data and analytic services.”

CEO at the LSE, Xavier Rolet explained within the earnings report: “FTSE Russell indexes are used throughout the investment and trading value cycle and they are well positioned to capitalise, for example, on the rapid expansion of the ETF market.

“The global ETF market currently represents around US$3.5 trillion in assets under management and FTSE Russell’s indexes are extensively being chosen as the benchmark for ETF issuers around the world.”

Similarly, real time data sales increased 7% year-on-year as the exchange focused on enterprise licensing and expanded the use of non-display applications.

Discussing the proposed merger with Deutsche Boerse the LSE said: “We firmly believe that it would deliver significant customer and shareholder benefits through the acceleration of our complementary growth strategies, products, services and geographic footprint.”

The merger suffered a setback earlier this week when the European Commission urged the exchange sell its fixed income business MTS.

The exchange has refuted the sale of the business and said it regards the sale as being ‘disproportionate’.

The European Commission is set to reveal the outcome of the second phase of the merger process on or before 3 April this year.