LSE loses out as rivals steal market share

TRADING on the London Stock Exchange (LSE) has plunged with new rivals like Chi-X Europe snapping at its heels, sending the company’s revenues down nine per cent to £154.9m.

The LSE has seen its share of trading of FTSE 100 stocks drop to 64 per cent last month from 78 per cent a year earlier. Its position is being eroded by smaller pan-European trading platforms like Chi-X, BATS and Nasdaq OMX.

Chi-X, the most successful of the upstart new platforms, increased its share of FTSE 100 trading to over 21 per cent from 13 per cent over the same period.

Last month the LSE struck a deal to buy Turquoise, another rival share trading platform, and plans to merge it with its “dark pool” business Baikal to form a new pan-European trading venture.

The LSE has been under pressure to lower its fees to retain large value trades. It recently appointed a director of post trade services, Kevin Milne, with a brief to bring down clearing and settlement costs.

The London market is set to benefit from a flurry of IPOs in coming months.

The capital markets business, its biggest division, posted a 13 per cent fall in revenue to £69.9m between October and December. Post-trade services also saw a 13 per cent fall in revenue to £29.1m while revenue from IT services grew three per cent to £55.4m.

“Market conditions have not been easy in the last quarter, particularly in cash equities, though the group has benefited from the breadth of its activities. Market conditions are expected to remain testing in the current quarter,” said chief executive Xavier Rolet.

“We continue to focus on improving the shape of the business, with actions clearly underway to reduce underlying operational costs,” he added.