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The London Stock Exchange Group said on Thursday it was optimistic about a recovery in stock market prices, as the stock exchange operator laid bare the damage from a paucity of initial public offerings in the UK last year.
LSEG said revenue from IPO and stock market trading fell 8.8% year-on-year in 2023 to £227 million, reflecting a quiet year for listings.
The group said: “2023 was a bad year globally for IPOs, but the schedule for 2024 is encouraging.”
Several companies have recently decided to abandon their current UK listings in favor of rival exchanges in New York and Frankfurt, citing a sharp decline in liquidity in British stock markets and the potential for higher valuations in the United States.
The average daily value of shares traded on the stock exchange fell 20% to £3.7 billion last year, further underlining the declining appetite for UK-listed companies.
LSEG said it will launch a £1 billion share buyback this year as it reported revenues of £8 billion in 2023, up 7.8% on the previous year.
Stock market activity accounted for just 2.8% of revenue, with data and analytics bringing in the most money and accounting for two-thirds of revenue.
LSEG’s operating profits fell 3.2% year-on-year to £1.4 billion.
Rising interest rates helped push revenue from the company’s post-trade and clearing businesses by 19% as traders sought to manage “uncertainty over the timing and extent of central bank interest rate movements “, LSEG said.
The company itself benefited from higher interest rates, earning £289 million in Treasury net income, up 13% on the previous year.