LSE Says Brexit Hasn't Changed Client Behavior at Clearing Arm

(Bloomberg) -- London Stock Exchange Group Plc said the U.K.’s looming departure from the European Union isn’t deterring firms from closing deals on some of its markets despite challenging conditions.

Key Takeaways

  • LSE’s LCH clearing arm booked a 17 percent rise in income, with its interest rates business posting record volumes after regulators and politicians allowed companies to continue seamless access in the event of a hard Brexit.
  • Chief Executive Officer David Schwimmer also signaled the LSE may make more purchases, according to its first-quarter statement on Wednesday. LSE is “well positioned to develop its growth opportunities further in the evolving macroeconomic landscape,” he said.
  • For the first quarter, income was up 5 percent to 546 million pounds ($712 million), which was slightly lower than the average forecast of 549 million pounds, according to analyst estimates.

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  • At a Saudi Arabian conference last week, Schwimmer said he was working closely with the local exchange to help small companies raise external funds. Exchanges including LSE are meanwhile vying to win the delayed listing of Saudi Aramco, the world’s biggest IPO.
  • Initial public offerings across Europe were down 37 percent by value last year, according to figures compiled by Bloomberg, as market volatility and economic uncertainty deterred some firms from joining public markets.
  • The LSE made its first external acquisition under Schwimmer in January, taking a 4.92 percent stake in Euroclear. It also recently increased its stake in LCH, the world’s largest clearing house for interest-rate swaps.
  • Rival exchange operator Deutsche Boerse has been on a shopping spree and is in talks to buy FXall.

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