Newspaper article The Evening Standard (London, England)

Cruickshank Deserves Credit

Newspaper article The Evening Standard (London, England)

Cruickshank Deserves Credit

Article excerpt


DON Cruickshank's decision this week to step down next year as chairman of the London Stock Exchange was the signal for more backhanded tributes than was fair. The majority, and rather sour, view was that the Exchange was still with us, but not going anywhere.

But many of those running down Cruickshank are the same people who were pushing hard a couple of years ago for it to merge with Nasdaq, the US technology-oriented stock market. If Cruickshank had taken that advice, it really would have been a disaster.

Nasdaq is in trouble at home and abroad. Its international strategy is in tatters following its abandonment last month of Nasdaq Japan while dollar volumes of business were 35% down in the US in the first half of this year against the equivalent period of 2001. Trading is so slow that Merrill Lynch this week said it will no longer make markets in 7600 Nasdaq stocks but will focus henceforth on the larger 2400 most widely held. It is not every day the world's biggest retail broker pulls the plug on three quarters of the shares on an exchange. If that happened here, even on a lesser scale, there would be outcry.

Now contrast Nasdaq with London. Despite the most savage bear market for 30 years and the virtual disappearance of privateclient business, average daily turnover on the London Stock Exchange is soaring and volumes are regularly hitting record levels. Admittedly, this is often not traditional equity business and much of it comes from the need for derivative contracts and contracts for differences to be unwound through the Sets electronic trading system. But that does not alter the fact that the Exchange is doing astonishingly well in the prevailing conditions.

It is also doing better than Deutsche Borse, which this month announced the closure of the Neuer Markt - a market that lived by the tech boom and died by it. This also reflects well on Cruickshank's stewardship because London's equivalent, the Alternative Investment Market, continues to grow. …

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