London Stock Exchange Group: Equity arm continues to lose relevance
London Stock Exchange Group’s (LSEG) equity business has continued to diminish in importance, as the firm struggles to attract new IPOs to UK markets.
LSEG’s market arm was actually the fastest growing part of its business in the first quarter of 2025, but not due to the London Stock Exchange itself, the firm revealed in a trading update today.
In fact, the group’s stock exchange equity business continued to shrink as a proportion of total income, bringing in just £62m throughout the quarter.
While this was an increase from the £60m in the first quarter of 2024, the 3.3 per cent rise compared to an eight per cent jump in revenue throughout the rest of the group, and a 13.3 per cent rise in its markets arm.
“We saw strong, volume-driven growth in secondary markets, although this was partly offset by subdued primary revenue growth,” said the group.
IPO drought
The London Stock Exchange has struggled to attract new floats to its market over recent years, falling to 35th in IPOs among all bourses last year.
In the first quarter of 2025, there were only four IPOs on the stock exchange, compared to 15 takeover bids.
In contrast, LSEG’s bond and derivative market arm saw revenue rise 24 per cent to £394m, while income from its over-the-counter derivatives business jumped from £138m to £161m.
“Our markets division saw strong broad-based growth against a backdrop of elevated volatility, which has persisted into April reflecting continuing uncertainty around the outlook for financial markets and the global economy more broadly,” said London Stock Exchange Group CEO David Schwimmer.
Some investors in LSEG have been calling for the group to offload its stock exchange business, instead rebranding with a focus on data and technology.
LSEG bought data firm Refinitiv in 2021, and in 2022, entered a 10-year partnership with Microsoft, where the tech giant took a four per cent stake in the group.
Revenue from its data and analytics arm made up more than £1bn for the first time so far this year, almost half of all its revenue, having grown 4.4 per cent since the first quarter of 2024.
“We continue to drive the strategic transformation of our business – building a strong product pipeline, investing in our engineering talent and delivering on the Microsoft partnership,” added Schwimmer.
LSEG is also pushing ahead with the share buyback plan announced in February, stating that £245m of the £500m it set aside to spend on repurchasing stock had already been spent.
The group’s stock price is up more than 30 per cent in the last year.