LSE Trading Declines 43% on Equity Slump, Loss of Market Share

By Nandini Sukumar

Sept. 24 (Bloomberg) -- London Stock Exchange Group Plc said trading dropped 43 percent as stocks slumped amid the worst financial crisis since the Great Depression and Europe’s oldest independent bourse lost market share.

The average daily value of trades on LSE’s markets for the five months ended Aug. 31 fell to 4.6 billion pounds ($7.5 billion) from the year-earlier period, the London-based exchange said in a Regulatory News Service statement today.

LSE, along with other traditional exchanges such as Deutsche Boerse AG and NYSE Euronext, has been losing market share to so-called multilateral trading facilities including Chi-X Europe Ltd., Bats Europe and Turquoise. Chief Executive Officer Xavier Rolet, who started in May, is attempting to stanch the decline by changing the way LSE charges and looking to diversify into markets such as corporate bonds for retail investors.

“Although market conditions remain challenging, the group continues to see good levels of activity in many parts of the business,” Rolet said in the statement. “We continue to take actions to ensure the group is well placed to compete and develop.”

Rolet has been cutting jobs as he attempts to reduce costs. The exchange said today that 133 people, or 12 percent of the workforce, have left the company, saving close to 11 million pounds a year from the second half.

Market Share

LSE’s share of trading in FTSE 100 Index stocks fell below 60 percent on Aug. 4 for the first time as Europe’s oldest independent bourse lost more ground to alternative trading systems. LSE accounted for as little as 59.92 percent of FTSE 100 trading on an intraday basis, according to data from Bats Global Markets.

This month, LSE agreed to buy Sri Lankan technology services company MillenniumIT for $30 million to gain access to its trading systems.

“The acquisition of MillenniumIT is an exciting and important step, that will provide a more flexible, efficient and high performance trading platform,” Rolet said today.

To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net