London Stock Exchange share price rises as boss Xavier Rolet pursues his American dream

Tim Wallace
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London Stock Exchange (LSE) boss Xavier Rolet
The US is set for a “golden decade”, London Stock Exchange (LSE) boss Xavier Rolet said yesterday, praising the shift to business-friendly policies in American politics.

Rolet is boosting the group’s American revenues in a bid to make the most of what he predicts will be a boom in the US.

After other exchanges tried to buy out the LSE, Britain’s best-known bourse is instead bulking itself up with the acquisition of Frank Russell Company for £1.6bn.

The purchase of the US group will give the LSE major operations across the pond, with US earnings set to account for more than one-third of its revenues.

“The US is the fastest-growing large econ­omy along with the UK,” Rolet told City A.M., highlighting the low cost of energy and strong financial markets when compared with much of Europe. “There is a growing political consensus – 60 per cent of governors are from the Republican party, in the senate house, and local and state officials. We have not seen this since the 1930s.

“I am not a forecaster, but in 2016 there is a high prospect of a moderate Democrat or moderate Republican, pro-business President. All these conditions are right to set the course for a golden decade in US.”

Rolet hopes the combination of events will drive the government to open up more federal land for shale gas and oil drilling and a series of pro-business tax changes which could lead to “a stampede of international investment capital going into the US.”

By contrast, the Eurozone is mired in another period of economic stagnation, while China is slowing down after years of enormously rapid growth, which had helped drive the global economy forward.

The slowdown in other parts of the world has dented hopes in the short term for a strengthened recovery in the US and UK. This week, Bank of England governor Mark Carney pushed back expectations of an interest rate hike to October 2015. But overall, progress is positive, with an end to money printing in the US, and an increase in real wages in the UK.

Rolet was speaking as the LSE reported a surge in profits for the first half of 2014. Revenues increased 18 per cent on the year to £592m, while adjusted operating profits rose 21 per cent to £286.1m.

The London Stock Exchange’s shares rose 1.38 per cent on the day.

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