In a bullish trading update, the LSE says new issues more than doubled in the eleven months to February 2005, although the majority of theses were on the smallcap AIM market.

Daily trading volumes increased to 266,000m, mainly due to growth in volumes on the Sets electronic order book. The average number of Sets bargains per day, including on the hybrid trading service Setsmm, increased 25% to 167,000 (2004: 134,000), following record average daily trading volumes in January and again in February (197,000 bargains/day).

The number of terminals receiving LSE data was up to 94,000, a 4000 increase over the same point last year. The exchange's Proquote division also experienced grwoth, with over 2600 screens and 175 corporate customers (Feb 2004: 1700 screens).

In a statement, Clara Furse, LSE chief executive, says: "The marked increase in new issues on both the main market and AIM, the strong growth in trading volumes and the pick up in professional terminals demonstrate good momentum in our core business areas.

"This, together with close cost management, leads us to expect a good outcome for the full year."

But Furse did not comment on the takeover situation. The LSE is currently in merger talks with Euronext, but the Paris-based exchange has not yet said what it would be prepared to pay for LSE.

According to press reports, Euronext is waiting for the UK's Office of Fair Trading to rule on its merger plan next week before disclosing financiual details of its bid.

Earlier this month Germany's Deutsche Börse scrapped its £1.35bn takeover bid for the UK exchange after facing increasing hostility to the move from shareholders and failing to gain a recommendation from the LSE board.

In a move to appease its rebel shareholders, Deutsche Börse plans to buy back around seven per cent of its shares and will seek permission to buy back more. But the Frankfurt exchange says it may still bid for the LSE if Euronext or another third party exchange makes a formal offer.