London Stock Exchange says Brexit may add to its challenges

Exchange operator saw revenue rise 7% in first half to £181 million

A stock ticker screen at the London Stock Exchange. The  exchange is pursuing a tie-up with Deutsche Börse, a transaction that has  been shaken by Brexit. Photograph: Phil Toscano/PA Wire

A stock ticker screen at the London Stock Exchange. The exchange is pursuing a tie-up with Deutsche Börse, a transaction that has been shaken by Brexit. Photograph: Phil Toscano/PA Wire

 

London Stock Exchange Group said the UK’s decision to leave the EU may eventually damage investor confidence and weigh on trading, adding to challenges facing the exchange operator.

“There is a broad range of possible outcomes resulting from this vote which has created uncertainty in the markets,” LSE said Thursday in a statement while reporting first-half profit. “The uncertainty or the outcome may erode investors’ confidence and impact primary and secondary market volumes, assets-based fees and clearing volumes in the UK.”

So far that has not been a problem. The company made more money from capital markets in the first half, with revenue rising 7 per cent to £181.6 million (€213.9m). Sales increased 9 per cent.

London Stock Exchange is pursuing a tie-up with Deutsche Börse, a transaction that has also been shaken by Brexit. The holding company’s London headquarters is a sticking point for German officials, especially in light of an eventual exit.

Officials in France and Germany have threatened to claw back euro denominated clearing – the majority of which happens in London – that is central to the acquisition. – (Bloomberg)