The chief executive of the London Stock Exchange (LSE) said most firms that switch their listings from the UK to US struggle to boost their share price. With London grappling with a number of firms departing, the Group’s CEO, David Schwimmer, ruled out offloading its flagship bourse as he insisted the market is bouncing back.
Speaking after LSEG’s annual results, Schwimer said he would not sell or spin off the LSE, and that it is a “core part” of LSEG’s strategy. Since joining from Goldman Sachs in 2018, Schwimmer has overseen LSEG’s transformation into a data and analytics powerhouse. The firm acquired Refinitiv for $27bn in 2021 and entered into a 10-year strategic partnership with Microsoft the following year.
Data and analytics now comprise roughly half of LSEG’s revenue, compared with less than three per cent from equities. That has given rise to speculation over the future of the 223-year-old LSE, which has been hit by heavy outflows from UK stock funds, a dearth of IPOs and large firms seeking overseas listings.
Schwimmer told reporters that LSEG’s trading platforms create “a virtuous circle” within the wider group’s strategy, which is “to provide a financial markets infrastructure and data ecosystem across the trade life cycle, across asset classes and on a global basis.”
“If you are trading on our execution venues, you are creating data,” he said. “We provide that data to the market. The market uses that data to make decisions around more trading.”
Schwimmer said the LSE is therefore “absolutely core to our strategy, core to our business and core to our brand” and that he is “very, very happy to have that business”.
Stephen Yiu, a well-known retail manager building a stake in LSEG, said earlier this year that the firm should offload the London Stock Exchange and rebrand to reflect its transformation. He named Euronext and Deutsche Borse as potential bidders. Following the worst year for London IPOs since the financial crisis, Schwimmer reiterated his positive outlook for listings.
“I still feel very comfortable about the pipeline, and we can see a number of companies that are in preparation mode and evaluating their plans,” he said. “The market continues to be fairly subdued for IPOs on a global basis.”
Schwimmer added that London remains one of the world’s largest markets by capital raised when including follow-on offerings. “This is a very healthy market, plentiful liquidity, lots of activity,” he said.
The government has hurried to revamp the regularity rule book in the hope of making London a more attractive IPO venue, including an overhaul of listings rules last summer and plans for a private stock market called Pisces.
Schwimmer said: “When you look at the facts, you look at the strength of the London market in terms of the broader capital raising, you look at the reforms and innovations that are coming to this market, I feel very good and very confident about the direction of travel.
LSEG’s annual earnings slightly surpassed analysts’ estimates, with capital markets revenue soaring thanks to a strong performance from its Tradeweb platform for fixed income derivates.
LSEG said it has a “strong pipeline” of new products under development with Microsoft as the firm’s annual earnings met expectations. In its results statement, LSEG said its first products co-developed with the US giant are now generally available to customers and that it was preparing for “increased customer adoption” this year.
In 2022, LSEG entered a 10-year strategic partnership with Microsoft – a move that saw it take a 4 per cent stake in the FTSE 100 group. Schwimmer said it had “reached an important milestone” in the partnership and that there was “a strong pipeline for 2025.”
The writer is our foreign correspondent based in the UK
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