London Stock Exchange Group PLC Pre-Close Period Update

Unless otherwise stated, the following commentary refers to the five months ended 31 August 2013 and, where appropriate, to the corresponding period last year.
 

  • Diversified Group performing well.
  • Total equity capital raised on the Group’s markets for the period was £9.3 billion (2013:  £4.0 billion), with 63 new issues (2013: 53); issuance has been good so far this year and the pipeline is encouraging.
  • In fixed income trading, MTS money markets (repo) value traded increased 14 per cent; and, cash markets value traded increased 37 per cent; MOT retail bond trading volumes were strong, showing a 15 per cent increase.
  • MTS announced the launch of MTS Swaps, expected in Q4 2013, a new platform giving buy-side institutions the ability to electronically trade interest rate swaps.
  • LCH.Clearnet has seen strong growth in all OTC areas with IRS notional cleared of $205 trillion, up 29 per cent; CDS notional of $94 billion, a nearly five-fold increase; and, Forex notional of $379 billion, up by over 140 per cent. Fixed Income clearing of €30.8 trillion was up 3 per cent, Commodities were also up 3 per cent and equities broadly similar to the same period last year.
  • Global Client clearing of Swaps performing well with a current average of over $1 trillion notional value cleared per week; in total, over $50 trillion has been cleared since launch.
  • FTSE performing well; demand for other information products, including UnaVista and SEDOL, remained good. Professional users of both UK and Italian market real time information decreased from June 2013.
  • Average daily UK equity value traded up 5 per cent, Italian average daily volumes down 7 per cent; derivatives trading volumes down 31 per cent over the same period last year.
  • Italian clearing volumes declined in line with trading levels; initial margin held increased 17 per cent, averaging €12.0 billion; with 95 per cent of cash margin invested on a fully collateralised basis by start of September.
  • MillenniumIT has been selected to be the business development and technology partner by the Argentinian Central Securities Depository.
  • The Group has entered into an agreement to acquire Turquoise Derivatives; the platform will continue to operate as at present but as a Regulated Market of a Recognised Investment Exchange   .
  • Borsa Italiana acquired a 70 per cent stake in EuroTLX, an Italian MTF operating in the retail fixed income market; revenue in last financial year to December 2012 of €14.5 million.
  • In July 2013, the Group signed a new £700m unsecured, committed revolving facility package with its banks, on favourable terms, to replace its existing credit lines. The new facility package comprises a mix of 5 and 3 year commitments which extend the Group’s debt maturity profile and underpin its financial flexibility.

Commenting on performance for the period, Xavier Rolet, Group Chief Executive, said:
“The Group continues to make good progress, with good operational  performance in particular at FTSE, in primary markets, fixed income and in OTC clearing at LCH.Clearnet.  We are focused on the ongoing development of our diversified business, including the opportunities at LCH.Clearnet, the expansion of our settlement and custody offering, development of our MTS Swaps service and sales of MillenniumIT software to global customers. In addition, we have seen exciting growth from SwapClear, as it continues to develop its interest rate swap clearing business in the US and elsewhere.

“We are well positioned in a wide range of businesses, and in a number of growth markets, and remain firmly focused on the execution of our strategy.”
The Group expects to announce its Interim results for the six months ending 30 September 2013 on 13 November 2013.
 
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