London Stock Exchange
From MarketsWiki
| London Stock Exchange | |
| |
| Founded | 1801 |
|---|---|
| Headquarters | London |
| Key People | Clara Furse, CEO; Massimo Capuano, Deputy CEO; Doug Webb, CFO; Martin Graham, Director of Markets; Nic Stuchfield; Director of Corporate Development; Chris Gibson-Smith, Chairman; Angelo Tantazzi, Deputy Chairman |
| Products | Cash equities, futures and options, debt, covered warrants, ETFs, reits, fixed interest, CFDs and depositary receipts |
| Web site | http://www.londonstockexchange.com/en-gb/ |
The London Stock Exchange is a multi-asset class electronic platform incorporating the world’s third-largest cash equities business[1] with a range of other securities trading, enlarged by the 2007 acquisition of Borsa Italiana, which added futures and options to its product mix.
Contents |
Structure and Regulation
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During 2007, 212 million electronic equity trades, with a combined value of £3.2 trillion (€4.7 trillion), were carried out on the cash markets of Borsa Italiana and the London Stock Exchange. The average daily number of trades over the year increased 55 percent on 2006 to 839,244, while the average daily value traded grew 41 percent to £12.8 billion (€18.6 billion).
n 2007, the total number of derivatives contracts traded across EDX and IDEM increased 32 percent on the 2006 to a total of 79.9 million, while the notional value traded grew 45 percent to £1.5 trillion (€2.2 trillion).
The battle for independence
The LSE has been at the forefront of consolidation in the global exchange sector, successfully fending off a series of hostile takeover bids and approaches starting in December 2004, before concluding its merger with Borsa Italiana in June 2007.
The LSE introduced a raft of shareholder-friendly measures as part of its defenses, including borrowing to finance a series of share buybacks, cost-control measures and the delivery on time and to budget of a new, high-speed share trading platform.[2]
The battle started on Dec. 14, 2004, with an unsolicited 530p-a-share offer from Deutsche Börse which, like subsequent proposals, was rejected by management as undervaluing the company.
The LSE then considered tentative offers from Euronext and saw off a hostile bid from a consortium led by Australia's Macquarie Bank – launched on Dec. 15, 2005 and valued at 580p-a-share in cash – before embarking on a year-long defense against offers from the Nasdaq.
The U.S. exchange made an indicative 950p-a-share offer on March 3, 2006, which was swiftly rejected by the LSE and withdrawn on March 30, 2006. Nasdaq started acquiring LSE stock on Apr. 12, 2006, building a 14.99 percent stake at 1,175p a share, adding a further 3.8 per cent on May 3 at 1,218p and 5.4 percent at 1,248p on November Nasdaq tabled a £2.9bn indicative offer on November 20, 2006 valued at 1,243p per share, with the US exchange boosting its stake from 24.1 percent to 28.75 percent. The LSE continued to reject the offer and rejected discussions with Nasdaq executives. The offer expired on Feb. 10, 2007.
Freed from the Nasdaq pursuit – though the U.S. exchange remained its largest shareholder – the LSE confirmed on June 20, 2007 that it was in advanced talks to acquire Borsa Italiana.[3]
The LSE and Borsa Italiana announced a merger agreement on June 23, 2007, with an all-stock offer of 4.9 LSE shares for each share in its Italian partner, valuing the deal at €1.6 billion, with a price/earnings ratio of 27-times 2007 earnings LSE shareholders received 72 percent of the combined group.[4]
The latest chapter saw the LSE caught up in the three-way takeover battle for OMX between the Nasdaq, Borse Dubai and the Qatar Investment Authority (QIA). Borse Dubai and the U.S. exchange subsequently teamed up with a joint offer, while the QIA bowed out in December 2007. The proposed deal, which is subject to shareholder approval but expected to close in early 2008, will see Borse Dubai acquire OMX and then transfer it to Nasdaq in return for a 19.9 percent stake in a new combined company as well as Nasdaq's 28 percent stake in LSE.[5] The QIA has a 14.9 percent stake in the LSE.
History
The LSE traces its roots to the stock trading started in coffee houses in London in the late 17th century, which evolved into the opening of the first regulated exchange on March 3, 1801.
The exchange amalgamated with 12 regional bourses in 1973 – the year in which female members were admitted for the first time – before the the modern form of the LSE was established with market deregulation in 1986.
The so-called “Big Bang” ended the separation of brokers and dealers, opened membership to outside companies and shifted trading from the floor to dealing rooms. The LSE was established as a private limited company.
The Alternative Investment Market was launched in 1985, providing a listing venue for smaller companies, and the Stock Exchange Electronic Trading Service (Sets) and Crest settlement operations started in 1987.
Shareholders voted in favor of a stockmarket listing in 2000, and the LSE listed on its own main board in July 2001.[6]
Product Development
News
- On July 15, 2008, The London Stock Exchange announced the launch of the UnaVista Broker Matching Utility (BMU), a new service for the central matching of post-trade data across prime brokers, executing brokers and hedge funds. The BMU service runs on UnaVista, the London Stock Exchange’s Web-based matching, reconciliation and data integration service hosted at the exchange’s data center.[7]
References
- ↑ 2007 Market Highlights. WFE. Retrieved on February 11, 2008.
- ↑ LSE prepares for freedom from Nasdaq bid. Financial Times. Retrieved on January 17, 2008.
- ↑ LSE in talks with Borsa Italiana. Financial Times. Retrieved on January 17, 2008.
- ↑ Press release. LSE. Retrieved on January 17, 2008.
- ↑ Qatar bows out of OMX battle. Financial Times. Retrieved on January 17, 2008.
- ↑ History. LSE. Retrieved on January 17, 2008.
- ↑ Press Release. London Stock Exchange. Retrieved on July 16, 2008.
