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London Stock Exchange - Facts and Figures


25th Aug 2020 Down to Business

London Stock Exchange - Facts and Figures
Starting from the 17th century, the London Stock Exchange builds its reputation by developing a well-regulated and powerful stock market.
The London Stock Exchange is today at the heart of the global financial community and the third-largest stock exchange in the world in terms of total market capitalization behind the New York Stock Exchange and the Tokyo Stock Exchange.

Coffee house beginnings and railway mania

Founded in the 17th century, it's one of the oldest stock markets in the world. The London Stock Exchange began its history in the offices of Jonathan's Coffee-House, and experienced strong growth in the 1840s, thanks to the acquisition by England of half of the European railway network. This stock market episode is known as "railway mania", during which stocks sparked a speculative economic bubble since investors piled into railway shares.
The Stock was Operative during the WW2
During The First world war, the London stock exchange wasn't operating for a couple of months while the Exchange remained operative during the entire WW2, except one day. It was on November 24, 1944, when London was hit by a V2 rocket.

The London Financial Big Bang

Liberalization of UK financial markets started in 1986. The name Big Bang refers to the various measures that transformed the British Stock Exchange system: the abolition of fixed commission fees and the change of means of communication between these stockbrokers.

Supporting small companies

In 1995 appeared the Alternative Investment Market (AIM) and two years later, the Electronic Trading Service (SETS) allowed the London Stock Exchange to gain economic weight, efficiency, and independence within world economic circles by creating new spaces and new specialized organizations.
 AIM is destined for smaller companies that don't fill requirements to be fully registered. It helps them to access the capital needed for their growth and development. Investors are encouraged to support AIM considering the business potential of companies listed.
 In October 2007, the LSE (London Stock Exchange) merged with the Italian Stock Exchange Borsa Italiana to form the London Stock Exchange Group.

 FTSE 100 Index

Launched in 1984, and informally called footsie, the FTSE 100 index comprises a standard listing of best-performing companies. The FTSE  enables a real-time index of the most prominent 100 companies listed on the LSE.
FTSE index also includes FTSE 250, FTSE 350, and finally, FTSE All-Share.

London Stock Exchange core services

The core strategy of LSE is to be the stock exchange of choice and to compete on a global level in the financial transactions market. The Exchange aims to grow the scale of its operations via various acquisitions, development initiatives, and joint ventures.
 Four main business areas or London Stock Exchange market:
  • Equity Markets: allowing companies worldwide to get the capital needed to grow through the Main Market and AIM.
  • Market Information Services: high quality, instant information supply to the financial community.
  • Trading Services: providing an efficient platform for brokers and companies worldwide

London's Exchange Broker's Motto

Today, there is an extensive set of rules for trading on LSE. But, that wasn't the case at the very beginning of the LSE. Its motto was created in 1923, saying Dictum meum pactum meaning "my word is my bond," supporting the idea that a person must always honor his commitments.The first set of trading recommendations emerged. Later these recommendations became the basis of all codified rulebooks that cover everything from trivial prohibitions like football play in the Exchange to more serious questions.

The companies listed on the London Stock Exchange

Traders on The London Stock Exchange comes from all corners of the planet. This goes in both directions. Traders in the UK have the possibility of trading on other stocks exchanges worldwide. It’s mostly NY stock exchange since many big companies are present there such as Apple, Zoom, Amazon and many more. 
Nearly 2080 companies on the LSE listing are either on the Mains Stock Market or AIM (Alternative Investment Market), where the companies trade shares publicly.
1498 companies out of the total 2080 are from the UK. This fact tells us how diverse the London stock exchange is.
The top five of these companies come from Guernsey with 110 companies registered, Jersey with 68, the British Virgin Islands with 37 companies included, and Isle of Man, represented by 34 companies.
 Besides these, there are 22 Russian companies and 20 listed companies from the US.

The market value of companies trading on UK Stock exchange

During the recession crisis in 2009, LSE reached its lowest capital value of 2.6 trillion pounds. Regarding the current crisis, the daily trade figures were at their peak in March 2020. The total market value of LSE was below 3.3 trillion British pounds.
In September 2019,  Hong Kong Exchanges and Clearing proposed to buy the London Stock Exchange for 36 billion pounds.
HKEX was valuing each London Stock Exchange (LSE) share at £ 83.61.
The offer came when the London Stock Exchange Group decided to buy Refinitiv, a financial data provider.
The LSE reacted in a reserved manner to definitely refuse the bid-offer.

Final Thoughts

London's economic dynamism refers to the privileged position the city enjoys between Europe, the Commonwealth, and the USA. It benefits from English as the international business language and common business practices in the Anglo-American world. Thanks to the City, the city attracts large numbers of highly qualified professionals from all over the world. Indian computer scientists, American bankers feel at home in London. It is a perfect place for both high growth companies and retailers that are just beginning their broker's adventure.
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