LSE’s revenue rose to 178 million pounds in the three months ended June on the back of 19 percent growth in real-time data sales and a 20 percent increase in clearing and settlement revenue.

The exchange operator said that despite tough markets the results highlighted the bourse’s well-diversified business.

"We are performing significantly better than other exchanges in Europe," said Furse.

The total value traded on the London and Milan cash equities markets dropped 8 percent -- outperforming rivals Euronext’s 19 percent decline and Deutsche Boerse’s 21 percent fall.

DISCOUNT

LSE shares were changing hands for 755 pence at 1:50 p.m., or 10 times forward earnings, in line with Spanish exchange BME’s 9.5 times, but at a 17 percent discount to Deutsche Boerse’s 12.1 times and 29 percent below NYSE Euronext’s 14 times.

Analysts have explained the discount by LSE’s heavy dependence on equity trading, but analysts remained cautious on LSE’s valuation because of stiff competition.

"The possible impact on LSE trading volumes and necessary pricing response is the most crucial issue impacting the share in our view," Credit Suisse analysts said in a research note.

LSE said it remained confident that active equity issuance and demand for real-time data would drive growth.

It has set up a pan-European off-bourse trading platform with Wall Street bank Lehman Brothers in response to increasing competition from new entrants.

Furse said the so-called dark pool platform -- which will go under the name of Baikal and is set to launch by March 2009 -- would be profitable in the first year of operation.

Rights issues from the Royal Bank of Scotland , Imperial Tobacco and Groupe Eurotunnel contributed to a record issuance volume of 24 billion pounds in May, with total money raised in the first quarter up 82 percent from a year ago. Secondary issuance generates less revenue for the bourse, however.

The bourse saw the number of real-time data terminals rise to 139,000 at June 30, up 1,000 from March 31 and up 19,000 from a year ago, thanks to strong growth from overseas users.

Post-trade operations such as settlement and custody generated 14.5 percent of total revenue, up from 13 percent a year ago, thanks to higher treasury margins, despite a 9 percent drop in contracts cleared.

During the quarter, the LSE bought back and cancelled 3.2 million of its own shares worth 31 million pounds.

Q1 2009 Q1 2008 Growth

(million pounds) %

Issuer 27.5 27.4 0

Trading 75.1 74.5 1

Information 44.8 37.5 19

Post Trade 25.8 21.5 20

Other income 4.6 3.4 36

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Total revenue 177.8 164.3 8

(Reporting by Daisy Ku, editing by Will Waterman and David Cowell)