The London Stock Exchange Group (LSEG) has reported positive first half results on the back of strong growth in its data and analytics and post-trade divisions.
Total income grew to £4 billion, marking an 8% increase in comparison with H1 results from 2022, largely thanks to an “outstanding” 19% growth in post-trade revenues.
Post-trade revenues grew to £590 million in H1 in comparison with £483 million in H1 of last year. The exchange attributed this to strong demand for its OTC derivatives services – primarily its Swap Clear service which saw boosted client interest in light of global interest rate uncertainty.
The exchange’s swelling data and analytics business saw its revenues for H1 of this year grow 7.6% to just over £2.6 billion, driven primarily by its customer and third-party risk offering. Subscriptions for its Refinitiv services also saw significant growth, increasing by 9.5% in the second quarter.
Speaking on the exchange’s earnings call, chief financial officer, Anna Manz, said annual subscription value (ASV) growth of 6.9% in the first half was almost 400 basis points higher than when LSEG acquired Refinitiv.
“Data and analytics is growing faster than it has for many years, with the ongoing improvements to our offering and strengthened customer relationships increasingly reflected in financial performance,” said LSEG chief David Schwimmer. “Post-trade once again demonstrated the critical role it plays in helping customers manage risk in uncertain markets, delivering outstanding growth.”
Capital markets finished up despite an 11% decline in equities and 2% decline in FX trading due to global primary and secondary market conditions. The division reported 1.5% growth to £759 million in H1 on the back of growth in its fixed income and derivatives business, which the exchange said had seen record volumes in H1 skewed to shorted duration instruments.
Tradeweb specifically saw record transaction volumes, LSEG confirmed in its earnings call, with a significant share gain in US credit.
LSEG completed its acquisition of Acadia this year, expanding its capabilities in multi-asset post-trade services. Acadia provides risk management, margining and collateral services for the uncleared derivatives markets. LSEG has held a minority stake in the firm since 2018.
The exchange has laid out plans to greatly expand its FX offering in the second half of this year with a new FX matching platform and a new artificial intelligence-based dealer tool.
The new tool will “change the face of FX trading”, the exchange said, by replacing its current long standing dealing product with a new one including a cloud-based FX trading environment, AI technology that populates a trade ticket in real-time based on trader chat and integrated with Workspace.
LSEG confirmed plans to launch a landmark 10-year cloud partnership with Microsoft in December which will see it spend a minimum of £2.3 billion on upgrades including new data and analytics products and services. As part of the deal the tech giant has also agreed to purchase a 4% stake in LSEG.
In Thursday’s results, the exchange confirmed the partnership was well under way with the first enhanced workspace functionality in development.