Stock Exchange boss slams 'illogical' Goldman analysts

Xavier Rolet, chief executive of the London Stock Exchange, today accused Goldman Sachs analysts of misunderstanding the group's Italian business and said that he had confidence in the group's operations in the eurozone.

The investment bank issued a "sell" note on the LSE yesterday, warning that the crisis in the Italian bond market would hit Cassa di Compensazione e Garanzia, the clearing house it owns in the country.

"We expect a gradual if slow improvement across the eurozone," he said. "Our Italian business is extremely resilient. Slapping a sell on our shares the day before we report when things in Italy may improve - which I think they will - is illogical."

Goldman said the Italian clearing house could account for a third of LSE's earnings, and the group's shares fell by nearly 4% yesterday.

Today they rebounded 11p to 841p as the group said first-half profits rose 79% to £180 million on revenues up 20% at £386 million.

The LSE boss said: "This is the result of the initiatives we took in 2009 and 2010 to create a far more diverse business. That has enabled us to cope with the increase in volatility and the ruthless competition we are facing in all our markets."

He said that the exclusive talks to buy the clearing house LCH.Clearnet were making good progress and added: "That would be a very good deal for London, particularly since the merger of the NYSE Euronext and Deutsche Borse will see the main London derivatives exchange move to Germany." On the other potential acquisition - the London Metal Exchange - where the LSE is reported to lining up a bid with the Singapore Stock Exchange, Rolet declined to comment. He said: "You would expect us, of all people, to comply with disclosure rules."

Share trading volumes were up 1% in London and 20% in Milan during October but the new issues market in both countries is down.