Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The London Stock Exchange Group on Thursday said it was optimistic about a revival in stock market listings, as the exchange operator laid bare the damage from a dearth of initial public offerings in the UK last year.
LSEG said revenues from IPO and equity market trading fell 8.8 per cent year on year in 2023 to £227mn, reflecting a quiet 12 months for listings.
The group said: “2023 was a poor year globally for IPOs, but the pipeline in 2024 is encouraging.”
A number of companies have recently opted to ditch their existing UK listings in favour of rival exchanges in New York and Frankfurt, citing a big decline in liquidity on UK equity markets and the potential for higher valuations in the US. However, fast-fashion retailer Shein is considering London as a back-up option for a listing this year if it fails to float in New York over its ties to China.
LSEG’s revenues from equities were the lowest last year since 2020, when companies ditched their listings during the outbreak of the coronavirus pandemic.
The average daily value of stocks traded on the exchange sank 20 per cent to £3.7bn last year, further underlining the declining appetite for UK-listed companies.
LSEG said it would launch a £1bn share buyback this year, as it reported revenues of £8bn in 2023, a rise of 7.8 per cent compared with the previous year.
Equity market activity accounted for just 2.8 per cent of revenues, with data and analytics bringing in the most money and accounting for two-thirds of revenues.
Operating profits at LSEG fell 3.2 per cent year on year to £1.4bn, in line with analysts’ expectations. Ben Bathurst, analyst at RBC Capital markets, said the company presented “a healthy ongoing revenue development picture”.
Rising interest rates helped push revenues at the company’s post-trade and clearing businesses up 19 per cent as traders sought to manage “uncertainty around the timing and scale of central bank interest rate moves”, LSEG said.
The company itself benefited from higher interest rates, earning £289mn on net Treasury income, up 13 per cent compared with the previous year.
