London Stock Exchange PLC (LON:LSE) topped the FTSE 100 gainers today as Morgan Stanley issued a bullish earnings preview for the bourses operator ahead of full year results due on 2 March.
In a Theme Trades note to clients, the US bank’s analysts said that it sees an “upside surprise” from the LSE numbers.
READ: LSE chairman to step down in 2019 after shareholder calls for his resignation over CEO ousting
They noted that volumes across LSE’s secondary markets - cash equity, Italian fixed income and derivatives – were robust in the fourth quarter and this has carried on into 2018 with volumes year-to-date around 20% year-on-year on a like for like basis.
In addition, the analysts said, the firm’s revenues linked to index levels, annual fees and custody should be supportive given the market backdrop.
They also pointed to the fact that the implementation of the European Union’s MIFID II rules around dark volume caps has been postponed until March.
The analysts also noted the FTSE 100 listed stock’s underperformance versus EU peers.
In late afternoon trading, LSE shares were up 4.2% at 3,958p.