Record trading volumes were recorded on the Exchange's markets, with UK equities business up 42 per cent at £1.6 trillion (1999: £1.2 trillion) and international equities business up 12 per cent at £2.7 trillion (1999: £2.4 trillion).
These record volumes were due, in part, to the rapid growth of trading in technology stocks, both on the main market and AIM. The launch of techMARK in late November, together with the increasing use of the internet by private investors, contributed to significantly increased levels of trading in the final quarter of the year.
TechMARK is the first of the Exchange's new attribute markets, grouping together technology companies. A second attribute market - extraMARK - was launched in February, providing a focus for innovative new products offering benefits for professional and private investors.
Domestic companies raised £113 billion in new capital, an increase of 56% over last year, while capital raised by international companies was up 31% at £103 billion. 285 new companies joined the Exchange's markets - an increase of 21% on the previous year. Of the new listings, 32 were international companies, including a number from South Africa, India and Japan, reinforcing the Exchange's position as one of the most international markets in the world.
The financial performance showed a significant improvement over last year. Turnover from continuing operations was up £20.0 million to £164.0 million, while operating profit from continuing operations was £36.7 million (1999: £8.6 million).
Buoyant trading volumes, particularly during the final quarter, led to an increase of £13.6 million in Trading Services revenue to £54.1 million. The favourable market conditions also contributed to growth in Company Services revenue.
Profit before tax was £48.5 million, with profit after tax of £33.9 million. Earnings per share were 114.1 pence (1999: 49.5 pence).
At an Extraordinary General Meeting in March, an overwhelming majority of the Exchange's 'B' shareholders approved the proposals to move to a new ownership structure.
The decision to demutualise, coupled with the Exchange's strong market standing, has placed it in an ideal position from which to play a leading role in the consolidation of European and other international markets.
On 3 May, the Exchange announced plans to merge its business with that of Deutsche Börse AG to form iX-international exchanges. The new company, which will be headquartered in London, will be the world's leading integrated exchange, operating the largest capital market in Europe and the biggest derivatives market in the world.
In addition to the proposed merger, the Exchange and Deutsche Börse have signed a Memorandum of Understanding with Nasdaq to create a pan-European high-growth market.
Detailed proposals for the merger are being drawn up in conjunction with the Exchange's advisers and will be sent to shareholders in July. Shareholders will be asked to vote on the merger proposals at an Extraordinary General Meeting to be held in the autumn. This year's Annual General Meeting will be held on the same day as the Extraordinary General
Sir John Kemp-Welch retired yesterday as Chairman of the London Stock Exchange. His successor is Don Cruickshank who formally took over as Chairman following the meeting of the board of directors held yersterday.
