LSE stays on top of the world

London market bolsters defence against Nasdaq

The amount of money raised in flotations on the London Stock Exchange in 2006 was over four times that generated on Nasdaq, according to new numbers compiled by the London bourse.

The data, published today, will add weight to the LSE's vigorous defence against the hostile £2.7bn offer from its smaller US rival. It has argued that Nasdaq's bid is "wholly inadequate" and does not reflect the LSE's superior growth and unique position as an international destination for financing.

In the year to October 2006, companies raised a record £27.9bn via new listings on the LSE, while the comparative amount for Nasdaq was £6.7bn.

The LSE's performance also outpaced the New York Stock Exchange (NYSE), where £18.4bn was raised, and the £19.3bn on the Hong Kong Stock Exchange.

Much of the growth in new listings was driven by the Alternative Investment Market. Of the 346 floats carried out on the LSE during the year, 261 came on the junior market. The roster of international companies also widened, as groups from the US, China, India and Western Europe opted for London.

Nasdaq argues that the LSE's perch is fragile. The NYSE's merger with Euronext will create the world's first transatlantic exchange, while a group of investment banks is developing a rival trading platform, dubbed Project Turquoise.

Nasdaq hopes the hedge funds that have bought shares in the LSE will opt to take the £12.43 per share it is offering. However, the LSE's stock is currently trading at £13.10.

The LSE published a 48-page initial defence against the Nasdaq offer, which included a 50 per cent increase in the dividend, just before Christmas.