Unless otherwise stated, the following commentary refers to the 11 months ended 28 February 2007 and, where appropriate, to the corresponding period last year.
London Stock Exchange Group plc ("the Exchange") today issued an update ahead of the close period relating to the financial year ending 31 March 2007.
In summary, trading performance remains very strong, with good performance recorded in all main business areas:
- In Issuer Services, activity remained strong with 470 new issues and total money raised increased 58 per cent to £47.6bn
- Average daily number of SETS bargains increased 56 per cent to 338,000, including record trading volumes in February, and average daily value traded up 40 per cent to £6.3bn
- Professional terminals at 96,000 were up 9,000 since February 2006 and 2,000 since December 2006
Commenting on current trading and outlook, Clara Furse, Chief Executive, said: "The Exchange continues to perform very well, with very strong growth on SETS in the final quarter, building on the excellent performance of the first nine months of the financial year. We are confident of an outstanding result for the current financial year.
"Our prospects for the year ahead are excellent as strong business fundamentals continue to drive strong growth. The Exchange intends to capitalise fully on its unique strategic position in global markets to deliver its vision to be the world's capital market."
New issue activity has been very strong in the year to date, with 470 new issues for the eleven months (2006: 547). With 94 new issues on the Main Market, primary market activity was similar to the high levels seen last year (2006: 95); while on AIM, the world's most successful market for smaller companies, new issues remained good at 375 (2006: 448). On both the Main Market and AIM the average money raised by new issues was significantly higher, with total money raised on our markets rising 58 per cent during the period at £47.6bn (2006: £30.2bn).
Highlighting the Exchange's position as the international listing venue of choice, the total number of overseas companies joining the Main Market nearly doubled to 33 (2006: 17).
At 28 February 2007, the total number of companies on the Exchange's markets was 3,236 (2006: 3,099) of which 1,632 companies were traded on AIM (2006: 1,426), up 14 per cent on the previous year. There were 645 international companies from 68 countries listed on the Exchange's markets at the end of the period (2006: 561).
SETS, the electronic order book, recorded another period of excellent growth, continuing to benefit from the secular change in equities trading, facilitated by investment in new technology.
In the eleven months to 28 February 2007, the average daily number of SETS bargains increased 56 per cent to 338,000 (2006: 216,000) and average daily value traded increased 40 per cent to £6.3bn (2006: £4.5bn). Very busy trading days were registered at the end of February, resulting in the month overall being a record period (414,000 bargains/day). Strong growth on SETS has continued in March, with average daily bargains to date of 515,000 (2006: 289,000), up 78 per cent.
The average value of a SETS bargain during the period was lower at £18,500 (2006: £20,900). At £1.34, the average SETS yield was lower than the same period last year at £1.53, reflecting the continued success of the volume discount scheme, growth in trading of SETSmm securities and algorithmic trading and increasing derivatives-linked business.
In the circular to shareholders dated 18 January 2007, the Exchange stated that the average number of bargains per day on SETS is expected to increase to at least 480,000 next year, an increase of at least 180 per cent in financial year 2008 relative to financial year 2005. The rate of growth in average SETS bargains per day achieved so far in Q4 - 63 per cent to 443,000 (2006: 272,000) - re-confirms the Exchange's belief in achieving this target.
For the 11 months, the total number of UK equity bargains per day increased 46 per cent to 382,000 (2006: 262,000), with an average 43,000 UK off-book bargains per day (2006: 46,000). Total UK equity value traded was £3.0tn, up 25 per cent on the previous year (2006: £2.4tn).
Demand for real-time price and trading data continues to grow, prompted by international demand for such information. At 28 February 2007, the total number of terminals receiving Exchange data was 116,000, an increase of 14,000 over the same point last year (28 February 2006: 102,000). Of the total, approximately 96,000 terminals were attributable to the professional user base, up 9,000 since February 2006 and 2,000 since the end of 2006 (31 December 2006: 94,000; 28 February 2006: 87,000).
Other product lines also delivered growth. At 28 February, Proquote had 3,600 screens, a 20 per cent increase on the same time last year (28 February 2006: 3,000 screens).
SEDOL, the Exchange's service providing unique identification for a range of global tradable securities, continues to perform well, with over 1,300 licences signed and 1.8 million securities covered.
The total number of contracts traded on EDX during the first 11 months of the year increased strongly, up 41 per cent to 28.0 million (2006: 19.8 million). The average number of contracts per day for the period was 122,000, up over 40 per cent on the previous year (2006: 85,000). Trading in Russian derivatives has continued its impressive start, doubling average daily volumes to 4,156 contracts from January to February, and achieving more than US$1 billion in value traded since launch on 1 December 2006.
Share Buyback Programme
In the circular to shareholders dated 18 January 2007, the Exchange committed to build on its successful track record of capital management, announcing a further share buyback programme of up to £250 million, in addition to the £18 million outstanding from the original £50 million programme announced last year.
The Exchange commenced on market share re-purchases on 12 February 2007, and since then has made good progress, buying back 5.8 million shares at a total cost of £75 million. This is in addition to £32 million of shares bought earlier this financial year (up to 17 November 2006). As at 28 March the number of ordinary shares in issue was 207,391,154.
The Exchange expects to announce its preliminary results for the year ending 31 March 2007 on 16 May 2007.