Rolet’s eye for an opportunity is paying off in a difficult market

 
Elizabeth Fournier
BRAVO Xavier. It’s been a bumpy ride for the London Stock Exchange chief executive since he took up the post exactly four years ago, with largely moribund equity markets and a non-existent IPO pipeline piling pressure on the exchange, but his strategies seem to be paying off.

Yesterday investors cheered the news that full-year revenues were up seven per cent to £726.4m, while net debt had fallen from £703m a year ago to £549.9m over the last 12 months – sending shares up almost six per cent and adding to the 23 per cent rise they’ve already seen since the start of the year.

In a sector rife with consolidation, LSE has remained on the sidelines since its failed merger with the Toronto Metals Exchange (TMX) at the start of 2011. Instead, Rolet has focused on seeking out assets that diversify income streams away from traditional equity markets – a majority stake in LCH.Clearnet, a fixed-income joint venture with TMX, and a very successful clearing business in Italy, CC&G.

With competition concerns high among regulators, he’s right to think small and branch out further afield, focusing on key overseas markets and the growing over-the counter market. At the moment it’s early days, but when the synergies really start rolling in, investors should have even more reasons to be cheerful.