Press releases 2001
20 December 2001
EXCHANGE REPORTS RECORD TRADING YEAR ON ITS MARKETS
12m investment in SETS trebles capacity
The London Stock Exchange today announced a record trading year in 2001. The number of trades was 22 per cent higher than the year 2000, which itself was a record year.
The Exchange also announced today the successful implementation in December of enhancements to SETS, the Exchange's electronic trading platform. This 12m investment has trebled the trading capacity of the platform.
To stay ahead of the rapid growth in its trading volumes, SETS was transferred, through a major development operation, to new Compaq Tandem hardware. The upgrade ensures that the Exchange can meet the ever higher standards required by its customers for performance and capacity.
To complement these enhancements, ExtranexTM - the Exchange's new global internet protocol network - is planned for roll out to customers in April 2002. As well as substantially increasing network capacity it will allow for a wide range of quality new products and services for Exchange customers.
The Exchange recorded a series of trading records during 2001, the year in which it became a fully listed company:
- There were 50 million trades carried out on the Exchange's markets in 2001, 22 per cent higher than the 41 million trades in 2000.
- The development of the SETS electronic order book has been central to the growth of trading activity. Order book trades accounted for a record 660 billion worth of trading in 2001, passing the previous record of 531 billion set in 2000 by 24 per cent.
- The number of SETS trades was a record 15.9 million in 2001, outstripping the previous record of 8.6 million trades set in 2000 by 85 per cent.
Trading on the electronic order book during 2001 accounted for as much as 63 per cent of the value of trades in SETS stocks in any one month. The average figure throughout 2000 was 52 per cent.
David Lester, Chief Information Officer, commented:
"Electronic trading on our markets continued to grow at a phenomenal rate this year - our customers clearly value our electronic order book, SETS. Our commitment to IT infrastructure investment underpins SETS' success and will enable the Exchange to bring quality new products and services to market, a number of which are already planned for 2002."
Explaining the trend of increasing trading activity, Chris Broad, Head of Broker Services, added:
"SETS is a reliable, flexible and scalable trading system that can handle these massive volumes from increasingly sophisticated traders. Its attractiveness has been a crucial factor in driving this year's increased market volumes. Other factors that have contributed include the increasing popularity of hedging and the benefits of the central counterparty that we introduced in February."
The Exchange's trading performance was also boosted in 2001 by a range of new products, including the International Order Book (IOB) and International Retail Service (IRS). The IOB introduced order driven trading for 84 of the more liquid emerging market stocks. The IRS gives retail investors access to 243 international blue chip stocks, quoted in sterling.
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Notes to editors:
- Trading figures include estimates for December 2001.
- The Exchange's main market and AIM accounted for 60 per cent of all IPOs in western Europe during the period 1 January - 30 November 2001. Source: London Stock Exchange, Thomson Financial and individual exchange websites.
- SETS, the electronic order book:
It is now over four years since the launch of SETS and the service continues to go from strength to strength. Overall, the market is benefiting from tighter spreads, greater liquidity and lower execution costs. Usage of SETS continues to grow, as shown by recent record increases in the number of orders entered, the number of firms using the order book and order book share of business.
For more information see: "SETS - four years on" available at www.londonstockexchange.com/trading/pdfs/sets4years.pdf
SETS was migrated to Compaq Tandem Himalaya S-series servers in December 2001.
- ExtranexTM is the new communication service from the London Stock Exchange, enhancing connectivity and bringing our customers increased capacity, compatibility and accessibility. Built on a resilient, private internet protocol network, the industry standard for data communications, ExtranexTM enables the Exchange to develop new markets and deliver new products faster.
Following the transition to ExtranexTM, the Exchange's customers will have access to a range of new initiatives the Exchange plans to introduce, including: RSP gateway, Crest network service provision, covered warrants and added value real-time information services.