Where next for LSE?

Wednesday, 29th March 2017 15:26 - by Rajan Dhall

So the EU antitrust regulator has ruled against the proposed merger between LSE and Deutsche Boerse, the price action surrounding the news was interesting. First off both companies sold off, then a minute or so after the news LSE shares started to bounce back and even hit session highs.

I believe this happened because LSE came out to comment that they could revisit the offer once again, but importantly they categorically refused to sell Italian arm MTS to make the deal go through this time (look out for that in the future). This led to a number of other deals to be cancelled. There were a few units being sold to Euronext that will now not be sold. 

 The question remains if any other company will come knocking and and look to merge, with some analysts touting the CME group or will the company shed more assets to make the deal happen. What is very clear is that I do not think the saga is over yet, this is a great business with strong financials and it looks attractive with the weak GBP at present.

From a technical perspective, the share price looks like it will retest the recent wave high of 3215, but once more details emerge about the complications of this deal we could see a move back to the 2958 support zone outlined in the chart. If no deal is done and nothing looks like it will happen, the current mean value area of 2830 looks to be a target.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.