The London Stock Exchange Group PLC
has vowed to buy back £1 billion ($1.24 billion) worth of its own shares from shareholders next year as the firm that owns Britain’s centuries old stock market pushes ahead with plans to transform itself into an artificial intelligence driven data company.
Since its $27 billion acquisition of Refinitiv in February 2021, LSEG has worked to remodel itself into a data and analytics company, with a view to capitalizing on surging demand for information, driven by the shift towards algorithmic trading and the rise of ESG.
LSEG’s Data & Analytics segment now accounts for the majority of the company’s revenues, with the firm having previously focused on the London Stock Exchange as its money maker.
Now it aims to boost its data and analytics revenues even further, following its December 2022 deal with Microsoft
through which it aims to use the tech giant’s AI expertise to boost its own offerings, with a plan to launch new products as soon as the first half of 2024.
“In less than three years we have transformed our business, trebling the growth rate of the Refinitiv Data & Analytics businesses we acquired and beating our growth targets line by line. But the real opportunity still lies in front of us,” Schwimmer said.
Speaking at a roundtable attended by MarketWatch, Satvinder Singh, the head of LSEG’s Data & Analytics segment, explained that the company is seeking to launch AI tools that will help digest reports and compile information using LSEG’s data.
The company which owns the U.K.’s main stock market, also upped its medium-term guidance, in stating it now expects to generate mid-to-high single digit revenue growth, and vowed to buy back £1 billion worth of its own shares from shareholders in 2024.
LSEG’s push to transform itself from a capital markets business into a data and analytics business comes as the London Stock Exchange itself has suffered from a drop in trades and a lack of companies seeking to list on the U.K. stock market.
Daily trade volumes on the London Stock Exchange are currently down 38% compared to 2022, data from LSEG shows.
In the first half of 2023, just 18 companies had initial public offerings on the London Stock Exchange, in listings that generated £593 million, Ernst & Young data shows. For comparison, 26 companies had IPOs on London’s stock market in the first half of 2022, raising £594 million.
In a roundtable meeting attended by MarketWatch, CEO David Schwimmer, however, said LSEG has “no plans to spin off the exchange” as he hit back at claims the company has shifted focus away from the London stock market in its marketing materials.
“There is no de-emphasis of the London Stock Exchange in our materials,” Schwimmer said.