David Prosser: The London Stock Exchange struggles to stay with the pace
Thursday 10 February 2011
Outlook For those who do not follow the relatively arcane world of international stock exchanges, the news that the London Stock Exchange, the grand-daddy of them all, is no longer a Premier League player in its industry may come as a surprise. But that is the truth of the matter: assuming the deal with TMX goes through, the combined operation would still only be the world's seventh-largest bourse.
The LSE has been eclipsed in various ways. Its former chief executive, Clara Furse, spent much of her time in charge fending off takeover attempts from the likes of Nasdaq and Deutsche Börse. Though the LSE has done some deals, notably with its opposite number in Italy, it has not been a part of the major global consolidations. Indeed, its deal with Toronto looked rather parochial yesterday in the context of the breaking news on the New York Stock Exchange and Deutsche.
At the other end of the scale, meanwhile, technology-driven new entrants to the market, especially Chi-X, have been steadily eating away at its share of the market. Less than 60 per cent of trades in shares in constituents of the UK's blue chip FTSE 100 Index now take place on the LSE, for example.
Nor has the LSE been quick enough to bring new products to market, particularly in the area of derivatives trading where Xavier Rolet, appointed to drag the company into the future just under two years ago, has still to unveil the fruits of his labour. Clearing has been a major omission too.
That's not to say the LSE has done nothing. Its purchase of the Sri Lankan outfit MillenniumIT has given it capital markets technology which is genuinely second to none – its systems will improve the LSE's own performance and can also be sold to rival exchanges.
Now, however, Mr Rolet appears to be making a bet on something that is a little less modern: thenatural resources sector. The tie-up with the Toronto Stock Exchange will create an entity that is miles ahead of its rivals in terms of listings or mining and resources companies (the deal with the Mongolian Stock Exchange announced last week will help, too). That might not seem very whizz-bang, but in the context of the commodities super-cycle it may prove to be a smart move.
It is certainly a different way to compete with those exchanges that have left the LSE behind. And Mr Rolet deserves credit for his imagination. Will his rivals be worried? Well, talk of a counter bid was rapidly subsumed by the NYSE-Deutsche news. For now, they have bigger fish to fry.
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 HeForShe campaign: Iceland to follow up Emma Watson speech with UN women's rights conference – for men only
- 3 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 4 Ed Sheeran dedicates song to David Cameron
- 5 Now we know whose fault it is if you end up being murdered in Thailand
Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
Car tax disc changes: Five facts you never knew about your (almost obsolete) tax disc
The Aral Sea: Nasa pictures show how what was once the fourth largest lake in the world has become almost completely dry
Thailand beach murders: Hannah Witheridge 'was raped by two men before being killed'
Isis, we are told, is a 'clear and dangerous threat to our way of life'. I’m sorry, but I just don’t buy it
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Should gay sex be illegal? 16% of Britons think so
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...