LONDON, May 9: The capital city of United Kingdom maintained its lead over New York in international equity trading in 2006 and increased its share of IPOs according to a new edition of International Financial Services London (IFSL’s) Securities Dealing report.

Trading in foreign equities on the London Stock Exchange increased by a third in 2006 to reach $3.3 trillion or 42 per cent of the global total.

This was slightly down on its share in 2005. New York’s (NYSE and Nasdaq) share totalled 33 per cent during the year. London is also home to Virt-x which accounted for 16 per cent of international equity trading in 2006. The 649 foreign companies listed in London (Main Market and AIM) at end-2006 were ahead of NYSE (451) and Nasdaq (321).

Adding to its dominance, London was also the top location for IPOs in 2006 with a 17.2pc global share ahead of New York’s 16.8 per cent, a marked turnaround from the previous year.

London is the leading location for trading international bonds. Global trading in international bonds increased more than five-fold over the past decade to reach $65 trillion in 2006.

Other factors contributing to London’s importance as a centre for securities trading include:

* Its 7pc share of the global equity market capitalisation (totalling $51 trillion at end-2006).

* London having the second highest equity market capitalisation in relation to GDP (after Japan) of the largest countries with 164pc in 2006.

* A high level of activity in the domestic market. UK domestic equity turnover totalled £3,211bn in 2006, up more than a quarter on the previous year. This represented 11pc of global turnover.

* Book-runners based in London accounted for about 60pc of Eurobonds issued and 70pc of the secondary market in 2004.