London Stock Exchange InformationThis page provides some of useful London Stock Exchange information to help a beginner understand things a little better. The London Stock Exchange is the oldest major financial market in the world but it is now no longer the largest. In March 2005, there were over 2,500 companies quoted on the London Stock Exchange market including over 300 from outside the UK. Such age and grandeur means that for many corporations, it is an honour and a sign of 'arrival' to be listed in London. There are a number of truly global companies that maintain market listings in more than one location for the extra liquidity provided. HSBC is a great example of this. To be granted permission to be
listed on the stock market
, companies must satisfy certain conditions (in advance of a listing) and then others on an ongoing basis. For example, companies must have a trading record of at least three years before they can obtain a listing.
The London Stock Exchange is commonly known for trading in UK equities, but is also a market for international shares, gilts (debt issued by the UK government - so safe that it is known as 'gilt edged'), corporate and local authority bonds (different types of debt securities), derivatives (traded by merchant banks), Eurobonds (a favourable tax situation makes London the premier Eurobond market in Europe), warrants and covered warrants (a time sensitive form of corporate stock ownership). With such a wide range of huge markets, 'The City' or 'Square Mile' as the area is known is massivley important on a global financial scale. When the interlinked and globalised nature of modern finance is considered, London is a vital part of everyone's finances! In fact, whatever the market capitalisation of the FTSE market when compared to others, it would be easy to argue that London is second only to New York in terms of financial importance. A book published in 2011, called Treasure Islands by Nicholas Shaxson suggests that because of Great Britain's history and the size and scale of the Commonwealth, London is a central hub in global finance. The network of nations and tax havens around the world that feed funds for investment into London is actually very impressive! Islands such as Jersey, Guernsey, the Isle of Man, from what Shaxson feels is the inner circle of this financial web. Outer links include Cyprus, Malta, the Caymans and British Virgin Islands. With such funnels as these sending funds into the UK and London for use, the London Stock Exchange will remain a powerful force for years to come. Needless to say, these flows of money, a developed home economy and an English speaking workforce have made London a magnet for the large American and global investment banks. To read more about the operations and workings of the London Stock Exchange, please visit:
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