LSE shares slump as float activity grinds to a halt

Click to follow

Shares in the London Stock Exchange (LSE) crashed to a near-52-week low on Friday ahead of a trading statement this week that will show the extent to which the credit crunch is biting into revenues.

Chief executive Clara Furse will give a feel for how the exchange has fared during the financial storm in the first few months of the year, which has seen the cancellation of many planned listings.

A small South Korean engineering firm, Taewoong, has been the biggest listing in London so far this year, raising just £138m on the obscure Professional Securities Market last month.

In contrast, by the end of the first quarter of 2007, companies listing on the main market and Alternative Investment Market in London had raised more than £5.7bn.

However, the LSE is expected to say that it benefited from the recent volatility in equity markets, with trading volumes up on the same period last year.

Earlier this month, the exchange reported that the number of electronic trades made on its UK order book in February had grown by 82 per cent year on year to 14.5 million.

Shares in the LSE closed down at 1,126p a share last Friday, a plunge that is likely to reignite interest in the exchange from a range of possible suitors.

The Qatar Investment Authority, which has a 14 per cent stake in the LSE, is understood to want to increase its position by trying to buy the 20 per cent holding owned by its rival, the Dubai Borse.

The LSE's share price is now less than the 1,242p-a share-offer tabled by rival American exchange Nasdaq in 2006.

Just last week, Nasdaq un-veiled plans for a new platform which will allow trading in 300 of Europe's most actively quoted stocks.