If I had to pick just one FTSE 100 share to buy after the stock market crash, I would have to choose the London Stock Exchange (LSE: LSE).
The financial services group looks to be one of a handful of businesses that are benefiting from the coronavirus crisis.
Activity in the financial markets has surged over the past month or so. Initial indications suggest this jump in trading activity has been a boon for companies like the LSE, both in and outside the FTSE 100.
Trading boom
Recent trading updates from the LSE’s financial services peers such as IG Group and CMC Markets confirm this trend.
IG saw a 29% increase in trading revenues during the three months to the end of February. The group, which is one of the largest online trading platforms in the world, said a “significant increase in active clients” was the reason behind the jump. Management has called the level of trading activity “unprecedented.”
Meanwhile, at the beginning of April, CMC Markets reported a 17% year-on-year increase in stockbroking and CFD trading revenue.
Other financial services firms around the world have also reported a boom in demand for investors looking to buy and sell shares.
These numbers imply trading activity has surged during the past few weeks. That could be great news for the LSE, which makes money on every trade placed through its range of trading platforms.
FTSE 100 market leader
Not only does the LSE own London’s primary stock market, but it also has a controlling stake in Europe’s largest clearing house.
Clearing houses are a fundamentally important part of the global financial system, which makes the LSE a critically important company. The more deals that are placed in the market, the higher the demand for clearing services. That’s another reason why the company could benefit from the current market volatility.
Not only does the FTSE 100 group own London’s leading market. It also owns Italy’s leading market Borsa Italiana, and Turquoise, a pan-European equities platform.
Further, it is in the process of buying one of the financial sector’s most significant data providers.
In other words, the company is one of the largest and most important financial services businesses in the FTSE 100. This isn’t going to change any time soon.
Therefore, LSE could be a great addition to your portfolio today. Shares in the financial giant are dealing at a P/E of 33 and support a dividend yield of 1% at the time of writing. In my opinion, this is a price worth paying for such a fundamentally important business.
While other companies are struggling to survive in the coronavirus crisis, all of the above suggests that the LSE could be thriving. For long-term investors, this could be a great opportunity to snap up a slice of this leading institution.
