Growth in flotations gives LSE a boost

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The Independent Online

The buoyancy of the market for flotations has boosted the London Stock Exchange in recent months, with the number of new issues more than doubling between April and June compared with the same quarter last year.

The buoyancy of the market for flotations has boosted the London Stock Exchange in recent months, with the number of new issues more than doubling between April and June compared with the same quarter last year.

The popularity of the LSE's Alternative Investment Market as a home for companies was underlined with 76 of the 92 new issues during the period taking place on the junior market. The strong flow of flotations helped the exchange's turnover to increase 9 per cent to £63.7m in the three months ending 30 June compared to 2003.

While the IPO market is much healthier than it has been in previous years, a handful of companies have still either been forced to shelve their floats or reduce the price.

Most recently M&C Saatchi last week had to slash its price to persuade investors to take up the offer of owning shares in its public offering.

While the exchange has benefited from an upturn in flotations, it said it had been hit by the impact of the lower fees it could charge companies which were listing their shares. This led to an 11 per cent fall in turnover at its issuer services arm. The exchange said last November it had agreed to cut its fees for firms listing on the market after an investigation by the Office of Fair Trading.

Clara Furse, the LSE's chief executive, said: "We continue to invest in new initiatives to expand and diversify our business and believe the exchange is well positioned for the future."

The number of terminals receiving the LSE's data slipped compared with the same period last year. But the exchange said its turnover from information services rose 4 per cent, boosted by growth in demand for Proquote - a lower-priced system aimed at stockbrokers, institutions and other market professionals eager to cut costs.

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