Clara leaves LSE on an upbeat note

Nick Goodway
20 May 2009

Dame Clara Furse will tonight bow out as chief executive of the London Stock Exchange on the back of a stronger set of figures than analysts had expected and a promise that the capital will be at the centre of the global economic recovery.

She also predicted even stronger demand from London-listed companies raising new capital through rights issues and share placings and eventually a return to new companies floating on the Exchange.

She said: "That is just a question of when markets will recover sufficiently to allow what is actually a very strong pipeline of new issues to come through."

Furse, 51, said the surge in rights issues and secondary fund-raising in the year to end-March was proof of the Exchange's importance to the economy and London's pre-eminent position.

The amount of money raised through the London stock market soared from £38 billion to £98 billion.

But while new issues were down in value from £21 billion to £7 billion secondary issues soared from £17 billion to £91 billion.

Furse said: "London has proved itself during the financial crisis allowing companies to raise fresh equity capital. That is testament to the quality, depth and breadth of the international asset management groups which are based here. London remains at the centre of the globalisation story. There will be an economic recovery and it will be centred here."

Furse has attracted fans and critics in almost equal number during her eight-year tenure at the top. In that time she has seen off five takeover bids, welcomed Middle East sovereign wealth funds as the Exchange's biggest investors and most recently had to cope with the upsurge in rival share trading systems in her own backyard.

Today Furse said: "We have produced a good underlying performance in very challenging market conditions. I am leaving the Exchange well-placed for the future."

She is also proud of her £1.3 billion takeover of Borsa Italiana just over 18 months ago despite the fact that a £484million write-off of goodwill on that deal left the LSE nursing a statutory pre-tax loss of £251 million today.

At the headline level, which Furse naturally prefers, operating profits adjusted for the Italian takeover are 1% lower at £339 million. On the same basis revenues are 1% higher at £671million. The dividend goes up 2% to 24.4p a share.

Furse also throws in the fact that despite the goodwill write-down the strength of the Euro means that Borsa Italiana is still worth more today in sterling than the £1.3 billion she paid for it.

She even claims to welcome the competition created by Europe's freeing up of the trading rules. The rapid growth and capturing of market shares from the LSE by the likes of Chi-X and Turquoise has knocked trading services revenues in the last year.

Furse finally quits the LSE board at the annual meeting in July and has promised herself "a really fantastic holiday". But few expect this to be the end of her career in the City.