Taking stock of the market

For the stock exchange itself, its media centre – where the BBC’s Declan Curry and reporters from Sky News, Channel 4 and others do their commentaries – is not only a revenue stream in its own right, it’s now “replacing the old trading floor as the public face of the Exchange”, says its annual report. The image is the reality.

It’s easy to get quite emotionally attached to the stock exchange. Admittedly, it’s not such a good show as it used to be back in the days when a top-hatted gentleman known as the government broker would stride onto the floor and announce a new gilt-edge ‘tap’ stock (probably at a ludicrous interest rate of about 12%), while floor dealers used to occasionally amuse themselves on quiet days by surreptitiously setting fire to the newspapers being read by their counterparts, the stockjobbers. Ah, the good old days. It was the ’80s.

Even when Big Bang blew away the cobwebs, restrictive practices and club-like atmosphere, it would have been inconceivable that the exchange could have found itself on the receiving end of a takeover bid from Deutsche Borse, never mind a French-Belgian-Dutch group calling itself Euronext.

As our survey reveals in our cover story, FDs are very attached to the London Stock Exchange, and they are certainly right to be concerned about it losing its independence and the impact on London as a capital markets centre. But the ‘dematerialisation’ of the whole share trading system makes it now a sort of glorified eBay interface between shareholder registers. Many of the things that make London special as a financial centre – especially the people and the money – won’t be affected by this takeover. It will be a great shame if the exchange loses its distinct identity, but not a disaster.