London Stock Exchange (LSE) – Will Aggressive Expansion Dent Long-Term Uptrend?

London Stock Exchange (LSE): Diversifying income sources with Refinitiv buy

  • Acquiring Refinitiv for US$27 billion with own highly-valued shares, but faces uncertain regulatory review
  • Shares trading near record highs (£58)
  • Watch for some corrective price action


One of the best currencies a listed corporate can use is its own highly-valued shares. Astute corporate financiers certainly understood this. In 2000, AOL deployed its hugely inflated shares to takeover Time Warner for a staggering $162 billion. It was a brazen move.

While London Stock Exchange’s $27 billion recent takeover of Refinitiv, a data and analytics company, is on a much smaller scale, LSE said it will issue shares to fund this takeover. A quick look at LSE’s share chart tells you why the firm adopts this tactic.

At its lows in 2009, LSE share prices were trading at around 400p; now, 5,600p. The market correction in 2018 and the messy departure of the long-time CEO Xavier Rolet did not reverse LSE’s bull trend. On the contrary, prices soon raced to new highs in April this year, in an orderly fashion that indicates steady investor accumulation (see below).

Currently, the market dividend yield of LSE is about 1%, while its price-earnings ratio is a rich 41.7. LSE’s market capitalisation is valued at about £20 billion. So it some ways the Refinitiv deal is a transformational one for the LSE.

Given that LSE share prices are now stretched against its long-term trend, as proxied by the 40-week exponential moving average, some caution are certainly warranted. A reversion to its long-term trend is not to be discounted.

Another indicator of how LSE will perform comes from its overseas peers, such as Nasdaq (LDAQ), Intercontinental (ICE) and Deutsche Bourse (DB1). These exchange stocks have displayed long-term bull trends like LSE, although some correction action are noted in the first two.

Compare Vetted Investing, Trading & Currency Accounts

Investing AccountsTrading PlatformsCurrency Transfers
Compare Investment Accounts

Compare Investment Accounts

Compare Trading Platforms

Compare Trading Platforms

Compare Currency Brokers

Compare Currency Brokers

Investment Advice Disclaimer

ALL INVESTING CONTAIN RISK: The information contained in this website is for informational purposes only and does not constitute financial advice. The material does not contain (and should not be construed as containing) investment advice or an investment recommendation, or, an offer of or solicitation for, a transaction in any financial instrument. Always seeking independent financial advice.