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The London Stock Exchange hit more bad news last week when Glencore, a mining group, said she was considering Moving your primary intake to another exchange in search of a greater value assessment. Glencore could join the exodus of companies like the flutter group of a group of CRH building materials.
The exchange can be comforted from one thing: it will not lose a list of much larger companies, the ninth most valuable to FTSE 100 with market capitalization of £ 62 billion earlier this week. This venture has turned into the past decade from the goal of taking over to the European Global Industry Champion: the London Stock Exchange group.
The Bay in the wealth between the London Stock Exchange and his parent LSEG is striking. AND failure flow Because the first did not interfere with the constant increase in the financial value of the latter. The explanation is simple: the list and trading shares only 3 percent of LSEG revenue due to its diversification in the past decade.
The LSEG transformation from the stock market into a global center for trading and cleaning of securities, together with data and analytics, it is difficult to blame as a defensive strategy. In 2016, he agreed to connect the same with Deutsche Börs, but it blocked the EU. Now it is worth a lot more than the latter, and six times higher than the market value of Euronext, which has an exchange of Amsterdam and Paris.
But LSEG’s story of financial success leaves it with an identity problem. The group does not think about moving to the New York Stock Exchange, but it could be worth more thanks to highly rated global trade and data. Another endeavor with less weight history in a similar financial position would be tempted to change the name or sell behind.
How are things standing, exchange and Lseg They are stuck in an unusual relationship. Lseg gets a shine from a company dating from the 17th century, while exchange benefits from the ownership of a group that is not susceptible to downloading offers. But it would be simpler for both if their financial prospects were more aligned.
Investors will hear the LSEG response this week when David Schwimmer, Executive Director Since 2018represents its results in 2024. His predecessor Xavier Rolet started transformation But Schwimmer, former Banker Goldman Sachs, made it progress. He made his sharpest turn, $ 27 billion acquisition In 2019, the financial data provider refinitiv.
Lseg turned a refinative into a slightly stronger challenger that Bloomberg under his workplace brand helps Alliance with Microsoft. The deal also gave him a 51 percent stake in Tradeweb markets, an American taxpayer and a diivatal platform with a fixed income that has increased sharply. He is much less known than the London Stock Exchange, but has higher revenues.
There is a wider lesson for exchange and market platforms: Investors often attach the highest values for the least exciting operations. LCH, which is one of the world’s largest cleaning houses for cleaning bonds and derivatives, among LSEG’s most prized means. Although stock lists receive more attention, bond trading and cleaning are quietly reliable.
LSEG -an antithesis is Euronext, which relies much more on shares. The Euronext market value is lower, but on measures such as the total number of new lists and quantities of trading on its seven stock markets, London won. Stéphane Boujnah, Executive Director, claimed last month That New York loss was just a “London problem”.
Boujnah would obviously love Lseg to lose patience with the London stock market and sold him. This is amazing, given the importance of exchanging with London as a financial center, no matter how small, from LSEG’s revenues. LSEG is in a much better position to buy Euronext, but that would raise competition issues as well as European hacks.
It is true that LSEG is well removed from the old game of music chairs for the stock market and build a wider job under a related brand. They would probably not thank the shareholders for their return: there are many data, analytics and business associated with the construction or purchase trade.
But the London stock market and its parent should not be too separate. Although it may not be much important for the financial assessment of LSEG that its original property has problems, the exchange remains the heart of the brand.
