London Stock Exchange Group: Thriving Amidst Adversity
Despite the frequent headlines surrounding the London Stock Exchange Group (LSEG) – from activist plots to concerns about the stock market – the company itself is thriving. As a listed company, LSEG has seen its shares rise by an impressive 92.79% in the last five years, accompanied by a cumulative return rate of over 95.89%. Morningstar analysts even believe that the company is undervalued, indicating further potential for growth in the future.
Fund Manager Confidence in LSEG Stock
LSEG has garnered the support of several high-profile fund managers, despite moments of caution. Lindsell Train, a prominent UK fund house, holds a significant stake in LSEG through various portfolios. Founder and portfolio manager Nick Train acknowledges the initial concerns surrounding LSEG’s acquisition of data giant Refinitiv, but emphasizes that these fears have been proven unfounded. LSEG’s shares have risen by 32% in 2023, and the company has successfully disposed of most of its shares, solidifying its position as a global provider of data, clearing, and liquidity.
LSEG: Perception vs. Reality
Matt Evans, lead portfolio manager on Ninety One’s UK Sustainable Equity fund, sees great potential in LSEG’s recent partnership with Microsoft. The partnership aims to harness the power of artificial intelligence (AI) using LSEG’s extensive dataset. Evans believes that this collaboration, coupled with London’s capital market advantages, positions LSEG and Refinitiv as leading players in the AI space. Despite the ongoing preference of some companies to list in the US rather than London, Evans is confident that LSEG can effectively communicate the benefits of a London flotation to potential listers.
Obstacles Ahead for LSEG
While LSEG has experienced significant success, it is not without potential obstacles. Niklas Kammer, Morningstar equity analyst, warns about the future oversight that could arise due to wide margins and opaque pricing practices by index providers. Additionally, turning the Refinitiv acquisition into a success may prove more challenging than anticipated, as LSEG becomes increasingly reliant on data and distribution, rather than exchange-driven revenues.
Artemis Income Fund Manager’s Perspective
Nick Shenton, manager of the Artemis Income fund, remains optimistic about LSEG’s future despite the challenges. Shenton views the company as a strong global technology business that is often overlooked. As capital flows away from London, Shenton sees an opportunity for shareholders in LSEG, emphasizing that the company’s reality far exceeds the perception.
In conclusion, while LSEG faces potential obstacles, the company’s performance and partnerships reflect its resilience and growth potential. With continued support from fund managers and a focus on leveraging technology, LSEG remains positioned for success in the financial markets.
Analyst comment
Positive news: London Stock Exchange Group (LSEG) is thriving, with a significant rise in its shares and a positive outlook for growth. It has garnered support from high-profile fund managers and has formed partnerships with Microsoft for AI utilization.
Analyst’s perspective: LSEG is well-positioned for success in the financial markets due to its performance, partnerships, and focus on leveraging technology, despite potential obstacles.
