The London Stock Exchange (LSE) expects its trading businesses to deliver a strong finish to its financial year after reporting equity and Italian derivatives growth in its pre-close period update.
In the 11 months ending 28 February 2011, the exchange reported a 2% year-on-year rise in the average daily value traded in UK equities, from £4.6 billion (€5.22 billion) to £4.7 billion (€5.33 billion). The LSE added that January and February 2011 were higher than the year-to-date average for UK equities, with £4.9 billion (€5.56 billion) and £5 billion (€5.67 billion) traded respectively. According to Thomson Reuters, the LSE garnered a 51.7% share of order book trading in FTSE 100 stocks in February.
“We are finishing the year on a strong note with good trading in recent weeks,” said CEO Xavier Rolet. “Year to date we have demonstrated robust performance across the group, with increases in cash equities, Italian derivatives and fixed income trading and consequent growth in clearing operations. Primary markets activity has been good and both the information services and technology services businesses are performing well.”
The bourse also reported a healthy start to the year for its pan-European multilateral trading facility Turquoise, which traded an average of €1.4 billion in January and February on its integrated lit and dark order book, higher than the €1.1 billion average recorded across the period as a whole.
Trading on IDEM, the LSE's Italian derivatives market, increased 12%, from 38 million contracts traded in the 11 months ended 28 February 2010 to 42.4 million contracts in the same period this year. But activity on EDX London, the group's platform for Scandinavian and Russian derivatives, fell by 40% from 53.2 million contracts to 31.9 million.
EDX will be incorporated into Turquoise's new pan-European derivatives platform when it launches in May. Initially, EDX will move under the Turquoise Derivatives banner, then Turquoise will begin to offer trading in pan-European single name and index futures and options, beginning with contracts based on the FTSE 100 index. The platform will then list other European derivatives products, but is currently facing a battle trying to obtain stock index licences from competing venues.
The LSE also noted that it is hoping to secure shareholder and regulatory approval for its merger with Canadian market operator TMX Group, with a view to completing the deal in autumn.
The deal is facing increasing resistance from Canadian institutions, including the National Bank of Canada, whose CEO Louis Vachon told the bank’s shareholders during its annual meeting earlier this week that his firm is “strongly against the transaction”. The National Bank of Canada also voiced its opposition to the LSE-TMX tie up in a public letter, written in conjunction with the Canadian Imperial Bank of Commerce and Toronto-Dominion Bank.