Dropping LSEG shares despite increment in dividend payout
London Stock Exchange Group (LSEG) Reports Strong First Half, Anticipates Busy Second Half
The London Stock Exchange Group (LSEG), which operates the London Stock Exchange, has reported a robust performance for the first half of the year. The company's total income increased by 6.8%, reaching a impressive £4.5bn. Pre-tax profits also rose significantly, by 43%, to just under £1bn.
David Schwimmer, LSEG's CEO, attributed the strong performance to a consistent cadence of new product launches during the first half of the year. In recent weeks, LSEG has been courting top tech startups to join the new PISCES market, a move that could further boost the group's earnings.
However, LSEG's shares slipped by more than two percent in early morning trade, reflecting investor concerns about the current market conditions. The first six months of the year saw only £160m raised from five listings on the London markets, the lowest-first half since 1995.
The second half of the year is expected to be more active, with a £2bn IPO of London-based bank Shawbrook and a potential 19bn euro IPO of Norwegian software giant Visma. Shawbrook's IPO could provide a notable boost to LSEG, given the current low IPO volume in London.
Schwimmer stated that there was a lot of interest in participating in PISCES, with him needing to turn people away from an event to showcase the market due to max capacity. The launch of a new PISCES-compliant market in the second half of the year for private businesses seeking a venue for secondary share sales could also help revitalize market activity and attract investor attention.
Despite the positive outlook, LSEG's shares remain down by more than 10 per cent since the start of the year. This could be due to growing fears that one of LSEG's largest constituents, Astrazeneca, is planning to leave in favor of a US listing.
In a positive move, LSEG upped its pre-tax earnings margin from 50-100 basis points to 75-100 basis points. The dividend was also increased by 14.6%, from 41p to 47p.
In conclusion, the London Stock Exchange Group is poised for a busy and potentially profitable second half of the year, with the anticipated IPOs of Shawbrook and Visma and the launch of the new PISCES market. However, the impact on LSEG's market performance depends on the market response at the time of flotation and the potential departure of Astrazeneca. (Sources: Investment Week 2025-07-23, Bloomberg Tax 2025-07-29, City AM 2025-07-23)
- The strong first-half performance of the London Stock Exchange Group (LSEG) suggests a promising future for the economy, with anticipation for increased income from the finance sector through upcoming business ventures, such as the IPOs of Shawbrook and Visma, and the launch of the new technology-focused PISCES market.
- As the London Stock Exchange Group prepares for a busy second half, expected growth in finance and business industries, particularly from technology startups and IPOs, may help mitigate concerns arising from uncertainty in the current market conditions and potential departures like Astrazeneca's proposed move to a US listing.
