London Stock Exchange: An overview of the world's oldest stock exchange

London Stock Exchange: What do I need to know?

The London Stock Exchange, abbreviated LSE, is the stock exchange of London, England, and one of the oldest stock exchanges in the world. It was founded in 1801 and is one of the largest stock exchanges in the world, with many of the companies listed on it also based outside the UK.

The London Stock Exchange has entered into strategic alliances with stock exchanges around the world, such as Tokyo, Tel Aviv and Sao Paulo, which strengthen its international presence.
In October 2007, the merger of the London Stock Exchange and the Italian Exchange was completed, creating the largest stock exchange in Europe and laying the foundation for future growth internationally.
The integrated group became:

  • The leading market operator in Europe with the most liquid portfolio of orders in terms of value and number of contracts traded;
  • The first marketplace for electronic trading of ETFs and securitized derivatives;
  • The first European market for trading fixed income securities thanks to participation in MTS.

In 2008 alone, 388 global companies were registered in Milan and London, and the number of international IPOs exceeded the number of transactions in any other financial market. Shares of more than 3,500 companies from 60 countries are listed on the London Stock Exchange, and the total market capitalization is 4.4 trillion. pounds. In the 2008 financial year, LSE's revenues were up 56% on the previous year to £546 million and pre-tax profits were up 45% on the previous year to £235 million. The company's revenue is generated 49% from trading services, 26% from information services, 15% from listing services and the remaining 8% from post trading services.

The London Stock Exchange allows the world's largest companies, as well as smaller companies around the world, to raise the capital they need to grow by choosing from four main markets:

  • Main Market or main market, which mainly concerns large companies seeking further opportunities for growth and development through various listing options (shares, bonds and representative certificates, as well as other types of instruments);
  • AIM is a market created to meet the needs of small companies with a simpler and more flexible admission system;
  • Professional Securities Market (PSM) - the market for debt securities and representative certificates of shares (depository receipts);
  • Specialist Fund Market (SFM), dedicated to specialized investment vehicles.

The London Stock Exchange also provides the global financial community with real-time quotes, news and other high-quality information. In June 2007, the London Stock Exchange launched a new trading system, TradElect, thanks to which the speed of trading has increased: more than 600 thousand orders are executed daily, and each transaction is completed in 6 thousandths of a second. This is the fastest trading system in the world. On the other hand, Infolect is the information service of the London Stock Exchange, which includes the order book and trading prices of its markets. In addition, the integrated group has the most efficient post-trading services in Europe.

The most important UK stock exchange index is the FTSE 100, or Footsie, which is a representative stock index of the 100 largest capitalization companies listed on the London Stock Exchange, representing about 80% of the total capitalization of the LSE. It is updated quarterly. The Footsie Index is managed independently by the FTSE Group, which was originally created as a joint venture between the Financial Times and the London Stock Exchange. FTSE is an abbreviation for Financial Times Stock Exchange. The index has been listed since January 1984 with an initial level of 1000. The most common measure of the London market is the FTSE 100 index, although there is also a more comprehensive FTSE All-Share index. Other related indices are the FTSE 250, which is the 250 largest companies after the 100 largest companies in the FTSE 100, the FTSE 350, which is a composite of the FTSE 100 and FTSE 250, and the FTSE SmallCap, an index representing small companies. In January 2009, the index included 6 largest companies: Royal Dutch Shell, BP, Vodafone, HSBC, GlaxoSmithKline and Astrazeneca.

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