London Stock Exchange: Complete Analysis Of Stock Exchange

London Stock Exchange
Image source unsplash

The London Stock Exchange is based in the City of London, England. The market capitalization of the London Stock Exchange in January 2024 is calculated at $62.08 Billion. Located in Paternoster Square near St. Paul’s Cathedral in the United Kingdom, it will be one of Europe’s high-priced stock markets in 2023.

The London Stock Exchange originated more than 300 years ago. All provincial exchanges were united in 1973 to form the Stock Exchange of Ireland and Great Britain. From there, it became the London Stock Exchange, which in turn included the amalgamation of the Milan Stock Exchange with Borsa Italia to form the London Exchange Group.

Main Market vs Alternative Investment Market

The London Stock Exchange functions in two separate equity markets while following distinctive regularity requirements, resulting in various safety margins.

Alternative Investment Market

London Stock Exchange also has another market called Alternative Investment Market. This type of market works for companies who want to enter their name in the London Stock Exchange at an affordable cost and with fewer listing rules. Thus, most companies in this category are small businesses.

Main Market

For all public and private investors this market is accessible for stocks. The FTSE 100 is the main market and is comprised of the UK’s 100 largest companies whose market capitalisation is in the hundreds of millions. Apart from them, there are other indexes including FTSE 250, FTSE Small Cap, and other kinds of indexes. When all three are combined, they are known as the FTSE All share indexes. The FTSE 100 has around 900 businesses which make up about 99% of the UK’s public companies.

The other two markets are the Specialist Fund Market and the Professional Securities Market, which are not commonly accessible to private investors.

How Does the Primary Market Operate?

The companies join the primary public market and aspire to generate more capital to expand their enterprises. But, before doing so, the companies must be valued independently and decide on how much value the business will offer to the public. Then the businesses will put their shares in the market for potential investors.

The main market is made up of the London Stock Exchange, where firms can sell securities to investors or the general public. The primary time of securities are as follows:

  2. Debt Securities
  3. Investment Entities
  4. Depository Receipts

Best Stocks To Buy in 2024

Suppose you are an investor looking for a steady income with companies that pay dividends and give financial stability. In that case, the London Stock Exchange Rio Tinto and Stellantis are the two stocks that offer more than 5% dividend yield and a Strong Buy consensus rating.

The London Stock Exchange Rio Tinto Stock is a multinational mining company that produces metal. The company has robust technology and automation that reduces costs and increases efficiency. Thus, the dividend yield of London Stock Exchange Rio Tinto is 5.83%, much better than the sector average of 1.878%.

The second stock is Stellantis, a multinational company that is in the automotive industry. The company persists in facing strong demand for strategic partnerships with vehicles. Thus, it is unsurprising that these stocks offer a dividend yield of 6.28% and a Strong Buy rating.