London Stock Exchange shrugs off threat from Amsterdam

LONDON Stock Exchange boss David Schwimmer today shrugged off the threat from Amsterdam, insisting the capital will remain at the centre of global finance.

Last month the Dutch passed London as the largest share trading centre for EU denominated shares, a direct consequence of Brexit.

There has been debate about whether this is significant or just symbolic.

Unveiling a 5% rise in annual profits to £1.18 billion, the former Goldman Sachs man, said the shift to Amsterdam was expected and “not meaningful” in terms of the LSE’s business.

“There is no question that London remains one of the world’s leading global financial capitals and will continue to remain so,” he said. He cited London’s strong regulatory and legal framework, insisting the LSE will stay headquartered here.

Schwimmer welcomed a reform to the stock market listing rules led by Lord Jonathan Hill aimed at attracting tech floats – Deliveroo picked London for its own float yesterday.

He called the Hill review “very constructive” and said the LSE is now a “truly global” business following the completion of its deal to buy data giant Refinitiv for $27 billion.

He said the Refinitiv deal was an “important milestone”, boosting the LSE’s presence in North America, Europe, Asia and the emerging markets.

The integration of Refinitiv will lead to job losses he confirmed, but declined to say how many. He is “working towards cost synergies” and reducing “overlap”.

Despite ongoing Brexit concerns for the City, the LSE upped its dividend by 7% to 75p.

The EU wants to move clearing – trade settlement – away from London, potentially a far more serious than the shift to Amsterdam for Euro equities.

Schwimmer sounded confident the LSE can navigate that threat.

“Clearing is a global market,” he said. “I hope we can get to a place where we get permanent recognition (from the EU).”

The shares today slipped 450p to 9038p which leaves the business valued at £53 billion.

Schwimmer noted that LSE staff have dealt with record trading volumes during the pandemic even though most of them are at home.

He thinks the shift to “passive” investing where computers track indices will continue.

“I don’t see any indication that we are at the end of the growth of passive investing,” he said, adding: “London is a great market, the UK is a great market.”