Excitement in London markets this week focused on the FTSE 250 listed London Stock Exchange (LON:LSE) itself, and its plans to “create a merger of equals” with Canada’s TMX. News of the deal, which would give the LSE a 55% stake in the combined entity, got a warmer reception in London than Canada. Quebec officials are scrutinising the detail but there was nevertheless a sense among analysts (and the exchanges themselves) that both sides really need this deal. That sense was fuelled in the aftermath by news that Deutsche Borse and NYSE Euronext were also in talks over a coming together.

What will it mean? Well, the LSE will get its hands on TMX’s derivatives trading technology, which has previously been seen as a chink in CEO Xavier Rolet’s armour. In turn, the Canadian group will go some way to plug the perennial problem of expanding its investor base. More importantly, the proposed merger is a bet on the current super-cycle of commodities, with the combined group promising to be the number 1 global listings venue for natural resources, mining, energy and clean technology. For the time being, the London Stock Exchange share price enjoyed a rise from 884p at the start of the week to 925p by Thursday.

Arguably, it will be the small cap exploration and development companies that feel the effects of the merger the most. TMX’s TSX Venture Exchange is a well regarded and well supported platform for Canada’s burgeoning army of resource stocks. Local investors “get” exploration. However, those companies that plan to go on and develop their project are often encouraged to dual list on the LSE’s Alternative Investment Market. On this side on the Atlantic, the general appetite for exploration is more restrained but the enthusiasm for development opportunities has been a hallmark of AIM’s success in attracting companies and raising cash for them.

Commodities prices boost London miners

Reporting its fourth quarter and full year figures this week, Randgold Resources (LON:RRS) said that despite operational and political setbacks in a generally challenging year, its had boosted its profit for 2010 by 43% to US$120.6 million. Randgold credited the performance to a strong fourth quarter which drove up attributable production by 30% to 132,099 ounces quarter-on-quarter. Lifted by a rise in the gold…

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