Unless otherwise stated, the following commentary refers to the five months ended 31 August 2007 and, where appropriate, to the corresponding period last year.
London Stock Exchange Group plc ("the Exchange") today issued a routine update ahead of the close period relating to the six months ending 30 September 2007.
In summary, the Exchange has delivered an excellent trading performance for the financial year to date:There were 216 new issues in the period, with total money raised up 12 per cent to £26.8 billionAverage daily number of SETS bargains increased strongly, up 75 per cent to 551,000, exceeding the target level of 480,000 for the full yearProfessional terminal numbers reached 102,000 at the end of August - up 12,000 since August 2006 and up 3,000 since June 2007
Commenting on current trading and outlook, Clara Furse, Chief Executive, said: "The Exchange continues to make excellent progress and has delivered a very strong trading performance for the year to date. In particular, the SETS electronic order book achieved enormous volume growth over the summer, as increased market volatility during the period added to strong growth already being facilitated by the new TradElect platform, in conjunction with customer and other Exchange initiatives. This excellent performance, together with high levels of activity in the primary markets and good progress in the Information Services division, ensures that we will report strong first half results.
"The Exchange is very close to completing the merger with Borsa Italiana, having secured overwhelming support from both sets of shareholders. We are focused on implementing our merger plans which will lead to accelerated growth for the enlarged group."
Issuer Services
Primary market activity over the period has been very strong, with total money raised increasing 12 per cent to £26.8 billion (2006: £24.0 billion). In total there were 216 new issues, slightly ahead of the same period last year (2006: 210).
In the first five months of the financial year there were 68 Main Market new issues, more than double the number in the prior year (2006: 33), and including 25 from overseas compared with seven in the equivalent period. AIM continued to attract new companies to its market, with 147 new issues (2006: 177).
The total number of companies on the Exchange's markets at 31 August 2007 increased to 3,308 (2006: 3,205), of which 1,685 were on AIM (2006: 1,579).
Broker Services
Trading on the SETS electronic order book grew very significantly over the period, with market volatility in the summer months adding to the strong growth recorded in the first quarter. SETS volumes increased 77 per cent to a total 57.9 million bargains for the first five months (2006: 32.7 million). Average daily SETS bargains rose to 551,000 (2006: 315,000), a 75 per cent increase over the corresponding period. New monthly records were set in every month over the summer, with daily bargains exceeding one million on three separate days in August.
These levels of trading were facilitated by the introduction of TradElect, the new trading platform introduced in June, with significantly enhanced capacity and improved latency, enabling market users to successfully execute and sustain high trading volumes at times of peak demand and extreme market activity. Also contributing to the growth were adjustments to the volume discount scheme, and the increasing success of SETSmm, a hybrid electronic order book, averaging 149,000 bargains per day (2006: 67,000).
The total value of SETS bargains increased 47 per cent to £918bn (2006: £624bn) as the average value of a SETS bargain decreased to £15,900 (2006: £19,100). This, combined with the increase in customer qualification for volume discounts, contributed to an expected reduction in the average yield per SETS bargain, to £1.00 (2006: £1.38) for the financial year to date.
The total number of UK equity bargains increased 70 per cent to 63.0 million (2006: 37.0 million), a daily average of 601,000 bargains per day (2006: 356,000); and the total value of UK equity bargains rose 40 per cent to £1.8 trillion (2006: £1.3 trillion), a daily average of £17.1 billion (2006: £12.3 billion).
Information Services
The number of terminals receiving real time Exchange data has shown further growth, increasing strongly by 18,000 to 125,000 compared with the same time last year (31 August 2006: 107,000), as the number of terminals outside the UK continued to increase. The number of terminals attributable to higher yield professional users was 102,000, an increase of 12,000 on the previous year (31 August 2006: 90,000) and up 3,000 on the end of the first quarter (30 June 2007: 99,000).
The number of Proquote screens rose to 3,800 screens, up 600 on same time last year (31 August 2006: 3,200), including 1,400 international screens.
Derivatives Services
EDX London delivered very strong growth with a total 17.7 million contracts traded (2006: 12.9 million), including 2.5 million contracts for Russian derivatives, launched at the end of 2006.
Borsa Italiana
On 8 August 2007, shareholders in London Stock Exchange Group plc and Borsa Italiana S.p.A. voted at their respective EGMs, giving overwhelming support of the combination through a recommended merger valuing Borsa Italiana at £1,103 million (€1,634 million). A prospectus for the listing of 79.5 million new shares in London Stock Exchange Group plc will be published today, 25 September 2007, enabling completion of the deal to take place in early October.
An update on Borsa Italiana's recent financial performance will be provided around the time of the Exchange's Interim results in November.
Share Buyback Programme
Since the start of the financial year, the Exchange has bought back 7.2 million shares, for a total consideration of £94 million. As at 31 August 2007, the Exchange had completed £154 million of the current £250 million share repurchase programme with the total number of shares in issue at 199,881,629.
Outlook
The Exchange has made a very strong start to the year, buoyed by excellent trading performance in all core businesses. As indicated previously, the Exchange expects a modest rise in operating costs as the business continues to grow strongly, and remains on course to report an excellent outcome for first half and the financial year as a whole.
Separately, London Stock Exchange Group plc (LSEG) today announced that Gary Allen and Peter Meinertzhagen have stepped down from the Board of LSEG.
Gary Allen joined the Board in 1994. He has been chairman of the Audit Committee and since, October 2004, Senior Director. Peter Meinertzhagen joined the Board in 1997 and has also been a member of the Remuneration Committee.
Sergio Ermotti, Paolo Scaroni and Andrea Munari will be joining the Board of the enlarged Group along with Angelo Tantazzi as Deputy Chairman and Massimo Capuano as Deputy Chief Executive.
The new directors will join Chris Gibson-Smith, Clara Furse, Jonathan Howell, Baroness Janet Cohen, Oscar Fanjul, Nigel Stapleton and Robert Webb.
The resignations of Gary Allen and Peter Meinertzhagen took effect from 24 September 2007 and the appointments of Angelo Tantazzi, Massimo Capuano, Sergio Ermotti, Andrea Munari and Paolo Scaroni to the Board are conditional on the completion of the merger with Borsa Italiana, expected to be 1 October 2007.
Chris Gibson-Smith, Chairman of the London Stock Exchange Group, commented: "I would like to thank both Gary and Peter for their substantial contribution to the Board of the London Stock Exchange. Both have seen the company through demutualisation and listing, as well as providing invaluable guidance and advice as members of Board Committees appointed during the Exchange's successful bid defences.
"I would also like to welcome the five new members to the Board of the enlarged Group. We look forward to working together to deliver in full the company's vision to be the world's capital market."
There are no other matters relating to the new directors which would require disclosure under Listing Rules 9.6.13R other than as set out below.