Diversified exchange operator London Stock Exchange (LSE) rose 4.1% to £15.40 on the back of an encouraging first quarter trading update with all five of the company’s divisions turning in strong performances.


The £4 billion cap revealed sales 39% up in the period to £249.7 million and 8% ahead on an organic constant-currency basis which included an adjustment for the acquisition of clearing house LCH.Clearnet.


Despite the sell-off in global equity markets in the wake of Federal Reserve chairman Ben Bernanke’s testimony to Congress (22 May) where he suggested he might begin tapering quantitative easing, the exchange’s core Capital Markets division still put in a strong showing.


Revenues at the arm, which includes the SETS electronic order book business, were up 11% in the period and, encouragingly from a competition perspective, this was in line with growth in both primary and secondary market activity. On a constant currency organic basis revenues were ahead by 9%.


The company’s Information Services arm, which includes the FTSE International business, reported sales up 11% and ahead 8% on an underlying basis. The Post Trade Services operations, excluding LCH.Clearnet, reported revenues up 10% and 5% ahead on an organic constant currency basis.


The exchange confirmed plans to expand its custody and settlement services through the establishment of a new central securities depository in Luxembourg.


Stockbroker Numis is less bullish. It has a 'hold' rating and £12.82 price target, saying it forecasts a mere 15% earnings growth over the three years to March 2016. It says the stock offers good long-term value but implies the shares are up with events.

Issue Date: 18 Jul 2013