London Stock Exchange says supply chains to delay tech spend

[LONDON] Problems in the world's supply chains have reached as far as London Stock Exchange Group. The bourse said in a third-quarter trading statement on Friday that "supply chain pressures may impact the timing of some technology spend this year."

It said there was no change to its overall cost and capital expenditure guidance. The warning shows that chip shortages and supply-chain snarls that have plagued manufacturers including carmakers are starting to affect server-hungry finance firms.

LSEG also said income will not grow as quickly in the fourth quarter as the prior three months, due to a strong 2020 comparison. It said the integration of data company Refinitiv remains on track.

"We are making excellent progress on the integration of Refinitiv and are comfortably on-track to achieve £125 million (S$231.5 million) of cost synergies in 2021, ahead of our original phasing," chief executive officer David Schwimmer said in a statement.

LSEG acquired Refinitiv for US$27 billion in January, meaning most of its revenue now comes from data services. Investors were spooked by higher-than-expected costs linked to the integration earlier in the year. Total income rose 7.6 per cent in the third quarter, adjusted for the acquisition and currency movements.

Equities revenues rose 15.4 per cent, helped by high-profile listings in London including Wise. The UK is rewriting its stock market rules in the hopes of attracting more technology firms to list in London.

BLOOMBERG