Former Lehman Brothers France CEO Giles Rolet, who will take the helm of the London Stock Exchange from long-serving chief Clara Furse on 20 May, could be the shot in the arm the exchange needs to cope with its current challenges, according to market observers.
Rolet has a strong background in trade execution. Before his eight-year stint at Lehman Brothers (Europe), he held senior equity trading positions at Dresdner Kleinwort Benson, Credit Suisse First Boston and Goldman Sachs. Some feel this experience could help the exchange weather the storm.
“Volumes are down everywhere and all trading venues are competing for a smaller pot,” said Bob McDowall research director for Europe at research and advisory firm TowerGroup. “In this environment, it is all about the basic issues of quality and speed of execution. The appointment shows that the exchange is a little rattled by the inroads that some of the alternative trading venues are making into blue-chip stocks.”
In recent months, the LSE, like other major European exchanges, has been rocked by competition from multilateral trading facilities (MTFs) and dwindling trading volumes and values. The average daily value of trades on the LSE fell 60% £6.2 billion in January 2009 from the record volumes seen in January 2008.
McDowall also expects Rolet to focus on resilience of the LSE’s systems. “The LSE clearly can’t have another outage as they did on 8 September last year. In that sense he is the right man for the times,” he said.
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