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Would you sell a business that had boosted sales volumes by 40% in the past 12 months and revenues by 35%, both to a new record? That is what the London Stock Exchange has achieved with just a few quiet days left before the year-end.
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The value of UK share trading increased 35% to £1900bn and the value of international shares traded in London rose 40% to £3400bn, so the total value of shares traded in London was £5300bn, and non-British shares provided two-thirds of it. Volume rose 40% in UK shares and 45% in international stocks. New capital raised for already-listed companies was about £10bn.
This year will be remembered, fondly or otherwise, for the boom in technology stocks, and the associated huge interest in stocks on the Alternative Investment Market, AIM. Turnover here rose an astonishing 140%, which suggests that Brian Winterflood, market maker to most of the AIM stocks, will have had yet another bumper year.
New issues were also buoyant - at least in the first half. Though a lot of companies were taken private and got a deal of publicity, more joined than left. Overall some 330 companies came to the market.
The figures are the more impressive because they started from a pretty high base. There was nothing wrong with trading in 1999 and indeed growth was positive throughout most of the 1990s. Turnover on the Stock Exchange today is unrecognisable compared with when the market was deregulated at Big Bang 15 years ago.
But there is a more relevant point for the present day. Though we do not yet have figures for Frankfurt or Paris-based Euronext, it is hard to believe they will have closed the gap on London. Assuming this is so, London will have further added to its lead its as Europe's premier centre for equities trading, which in turn suggests it would be extremely unwise to throw it away in an ill-judged deal with Nasdaq or anyone else. If things are going this well energy ought to be spent on exploiting the strength to squeeze the competition even more. London should not be offering them lifelines through alliances.
Analyst peril
Independent research has for some years been the City's home-grown oxymoron. It is not so much that the investment banks' analysts dare not criticise because they do not want to mess up other relationships within the firm, rather that research is seen as a way of ingratiating the bank with the companies concerned so it is retained as adviser on future deals.
To dull the pain before they count their bonuses, analysts have taken refuge in business models and endless charts and statistics. They no longer publish answers to the two questions crucial to any investment decision - does the company have a sustainable competitive advantage, and does the business have momentum? Answering those might be too close to the knuckle. You would certainly not have had a dotcom boom.
Analysts claim that what they say on the telephone privately to clients is rather different from what they actually publish. That may be true, but they should heed what happened recently in America.
One Henryk Kwiakowski persuaded a US court that having been impressed by research from stockbroker Bear Stearns, he took a $6.5bn punt on the strength of the dollar against a basket of competing currencies. Unfortunately the information, or at least the conclusions drawn from it, were wrong or ill-timed. In a matter of days the dollar fell, leaving Mr K some $300m lighter of pocket.
So he sued and won damages from the firm to cover a significant slice of his losses. UK analysts be warned. As Camelot's Dianne Thompson is fond of saying: 'It could be you.'
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