Liffe leap is sharp reminder for LSE

THE London Stock Exchange has been given a painful reminder of the cost of failing to take over Liffe when the futures exchange unveiled a 25% jump in turnover for the first half of the year.

Euronext, the European exchange which paid £555m for Liffe last December, said it traded 353 million contracts in the six months to 30 June. Liffe's profits are determined by the number of contracts traded rather then their size.

Much of the growth was underpinned by the increasing choice of equity-based derivatives and rising demand for hedging products amid the turmoil on financial markets.

Investors' growing appetites for hedging mechanisms was reflected in the 73% rise in trading of futures and options on individual equities. By contrast, trading in short-term interest rate products was up by only 11%.

However, Euronext, formed by the merger of the Brussels, Paris and Amsterdam bourses, revealed that its stock exchange had been far less active, with the number of transactions rising by only 3.6% in the first half.

Long-term underperformance by insurance market players, exacerbated by overcapacity and by crippling losses expected from last September's terrorist attacks, will see nearly half of the 86 syndicates operating in the Lloyd's of London market disappear, says a report from sigma, the research arm of insurer Swiss Re.