The Hong Kong Exchanges and Clearing’s attempt to buy the London Stock Exchange, which was being stalled for months by the LSE, has now officially been dropped, causing the exchange’s shares to decline 6.28%. HKEx under the helm of chief executive Charles Li has been on an expansion drive both East and West for years, acquiring the London Metal Exchange in 2012 and later expanding its trading link with mainland China through Shanghai Stock Connect.
But the attempt to take over the LSE proved a step too far as the London exchange fended off the bid that would have created a $70 billion company suspecting that eventually HKEx’s links to the local government would have led to political interference in the markets.
Though initially hit, LSE shares started gradually picking up. More importantly, the decline made barely any dent in this year’s rise in the exchange’s share price which went from barely 4,000 a year ago to just under 7,000 this morning.
Airlines were also hit after EasyJet reported profits at the high end of expectations but the counter-intuitive move was a reaction to the trade update highlighting problems across the airline sector.
The pound continues to decline as the PM is positioning himself for a standoff with the EU. Attempts to negotiate a Brexit deal will have to come to some sort of resolution by next week when the great and good of the EU gather for the EU summit on 17 October and then 19 October when MPs will have to approve any potential but unlikely new deal. Currency markets are clearly not holding out much hope as sterling is slipping both against the dollar and the euro.
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