The dire state of the London share market was exposed today as the London Stock Exchange revealed that the average value of UK shares traded on its electronic order last month was almost 27% down on two years ago.
Retail and institutional stockbrokers have recently warned that deal flows through their share trading arms have slumped as investors sit on their hands while the euro crisis pans out.
Today’s official numbers from the LSE confirm this.
In May the average value of shares traded on its UK order book was £4.3 billion. While that is only 6% down on the April figure it is 20% down on May 2011’s £5.4 billion and a staggering 27% lower than May 2010 when the daily average was £5.9 billion. Broking commission, which accounts for a sizeable part of stockbrokers’ income, is directly related to average trading values.
Many brokers have already trimmed the number of people on their trading floors this year but if volumes remain so low they may well have to cut harder and deeper.
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