Volatility boosts LSE

Much of the improvement came from post-trade services, which covers the group's Italian based clearing, settlement and custody business. Total income here rose by 64 per cent to £106.7m, driven by a jump in net treasury income from £16.7m to £54.3m. This reflected higher clearing volumes and increased Treasury income from the central counterparty business as a result of higher margin requirements, which the LSE used to place on deposit with Italian banks and generate income. Market volatility in Italy has remained high in the second half which has meant that average daily equity volumes in October were 20 per cent up on a year earlier.

Fee income from primary market listings rose 19 per cent to £40.5m, thanks to a 15 per cent rise in new issues (from 89 to 102), with total capital raised up a third to £23.3bn (thank-you, Glencore...). Income from secondary market trading of cash equities, derivatives and fixed income also showed an improvement, up 11 per cent at £96.1m, with the fixed income side boosting income by 29 per cent to £18.8m. And trading on the Turquoise trading platform has now doubled since its acquisition in 2010.

On the information services side, which together with post-trade services now accounts for more than half of group income, total revenue rose 6 per cent to £89m despite the number of UK terminals remaining flat at 93,000, while Borsa Italiana terminal numbers slipped 4 per cent to 134,000.

The LSE is pursuing a number of initiatives, including a possible deal that could see the exchange taking control of UK-based clearer LCH.Clearnet, which, if successful would give the LSE a clearing house for its UK share trading business.

Numis Securities is forecasting full-year pre-tax profits of £326m and EPS of 83.1p (2011: £296.3m/75.1p).