In its Q3 trading statement, the London Stock Exchange (LSE) reported lower equity trading activity in January, adding that “market conditions remain very difficult and uncertain” for the rest of the exchange group’s financial year.
The LSE said cash equities trading volumes and value since the start of 2009 have been lower than November and December’s average levels “and down in comparison to the record trading levels last January”.
The exchange said trading volumes on its SETS UK electronic order book increased 20% to 777,000 trades per day in the three months to 31 December 2008. But SETS value traded fell 30% as the FTSE 100 index slumped by 34 per cent compared to the prior period. Trading volume at Borsa Italiana was 7% lower at 253,000 trades per day in Q3.
For the nine months to December, SETS trading volumes rose 28 per cent to 752,000 trades per day, while value declined 12 per cent. The LSE described this as “a resilient performance set against an average 19 per cent fall in the FTSE 100 over the comparative period”. Borsa Italiana suffered an 8% decline in trading volume to 259,000 trades per day in the nine months to date.
The fall in the value traded in UK cash equities contributed to a 13% decline in Q3 revenues to £64.8 million from the LSE’s Trading Services division, which nevertheless accounted for 38% of group revenues in the quarter. Trading Services revenues fell 5% in the nine months to December.
The LSE trading statement added that trading volumes on SETS “remained good” with average daily bargains up 20 per cent, “reflecting the continued growth in high frequency, algorithmic traders using the low latency trading opportunities provided by our platform, and also boosted by the strong trading in October.”
LSE chief executive Clara Furse added: “Trading in the past quarter, in common with other major markets, became weaker, mainly reflecting the 34 per cent fall in average value of the FTSE 100 and a 47 per cent average reduction in the S&P MIB index equity market.
However, we are pleased to have successfully introduced TradElect in Italy during the period, to quickly move to a common trading platform for our major cash equity markets.”
The exchange’s Information Services division increased revenues by 15% to £47.1 million in Q3, which represents 28% of total group income. For the nine months to date, Information Services revenue grew 16 per cent to £136.9 million, partly due to “the overall higher level of terminals receiving real time data over the comparative period.”
The LSE’s total revenues for the nine-month period were up 5% to £516.5 million; revenue rose 4% in the three months to December, reaching £171.0 million.