London Daily

Focus on the big picture.
Wednesday, Jul 23, 2025

London Stock Exchange shares 'spooked' by costs from Refinitiv

London Stock Exchange shares 'spooked' by costs from Refinitiv

London Stock Exchange shares tumbled on Friday with analysts saying markets were “spooked” by costs for integrating data and analytics company Refinitiv, which it acquired in January for $27 billion.

The 300 year old bourse will transform into a one-stop shop for data, trading and analytics with the Refinitiv takeover and offered shareholders a final dividend of 51.7 pence a share as a reflection of the “good performance and confident outlook” for the new group.

But after a conference call with analysts, its stock fell 13% to 8,237 pence, its biggest one-day fall in a year.

Credit Suisse said the results, which included a 3% rise in revenue driven by growth in the FTSE Russell and clearing businesses and a 5% jump in adjusted operating profit, were broadly in line with expectations but guidance for mid-single digit cost growth for 2021 had “spooked the market”.

The bank said there were concerns that the overall long-term growth outlook for the enlarged exchange could be lower than previously anticipated, raising questions about what is an appropriate valuation.

Citi cut its rating on the stock to neutral from buy, also citing heavier than expected costs from the Refinitiv takeover.

“A need to improve the resilience of the legacy Refinitiv tech platform, suggests the bulk of the incremental 150 million euros operational expenditure investment will recur in 2022 and beyond,” Citi said in a note, adding that an earnings-per-share accretion target for this year now “looks very difficult to achieve”.

The exchange said that its FTSE Russell stock indexes business in Britain and most of its other information services will be slotted into a newly formed data and analytics division, as data now eclipses the group’s trading operations since the Refinitiv acquisition.

“While early days, the work we have done so far confirms the quality of the business and the extent of the opportunities across the group as we focus on integration and delivering the strategic and financial benefits of the transaction,” LSEG CEO David Schwimmer said in a statement.

Thomson Reuters, the parent company of Reuters News, now holds a 15% stake in the exchange following the Refinitiv deal.

Schwimmer declined to put a figure on job cuts, but said there will be a reduction in “overlapping senior leadership” this year. Savings will also come from rooting out overlapping locations, efficiencies across vendors and at some data centres.

The group will keep its offices in London’s Canary Wharf, where Refinitiv is based, and the exchange’s head office in the City of London.

EURO CLEARING


Following the end of the Brexit transition period, the European Union is piling pressure on banks to shift euro derivatives clearing from LSEG’s LCH arm in London to Frankfurt.

Credit Suisse quoted Schwimmer as saying that only 6% of LCH euro clearing volumes are for swaps traded by EU-based customers and that it was unclear how the EU could mandate the relocation of derivatives in other currencies.

Schwimmer said the booming U.S. market for special purpose acquisition vehicles (SPACs) could see investors coming off “poorly”, just after a government-backed review this week proposed loosening Britain’s SPAC listing rules.

Listings of the so-called “blank cheque” companies which use the proceeds to take private firms public through a reverse takeover, have rocketed in New York and exchanges elsewhere are keen to jump on the bandwagon. That has raised concerns about inflated valuations.

“There is clearly some froth in the U.S. market for SPACs,” Schwimmer told reporters. “Some of that could end poorly for some of either those opportunities or some of those investors.”

Schwimmer said he was confident that London will remain a global financial centre and that a shift in 8 billion euros of daily share trading from the City to Amsterdam in January due to Brexit had been anticipated.

($1 = 0.7201 pounds)

Newsletter

Related Articles

0:00
0:00
Close
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
×