Jeremy Warner's Outlook: LSE snubbed over Qatari exchange

Left at the altar again? Clara Furse's seeming inability to pull off a deal is actually more apparent than real – in fact, the London Stock Exchange last year sealed a perfectly good merger with Borsa Italiana.

Yet the shares have been in virtual freefall all this year on fears over the damage new entrants might do to the bottom line, and now, to give more ammunition to her critics, Dame Clara has been outmanoeuvred by one of her fiercest rivals, NYSE Euronext, for the contract to set up a new stock market in the boom economy of Qatar.

The loss of this deal is all the more humbling as Qatar is a 15 per cent shareholder in the LSE, and would presumably have been leaning over backwards to favour the company in which it has such a large investment. In the end, NYSE's $250m equity participation, in conjunction with its ability to offer futures and derivatives trading, sealed it for the Qataris.

Dame Clara claims there are lots of better, lower-risk opportunities in the region and elsewhere that are being actively pursued. The Doha deal, by contrast, carries considerable investment risk, since the proposed exchange is essentially just a start-up. Yet the impression remains that the LSE is being progressively frozen out both at home and abroad. The dangers of ending up just a regional tiddler against global giants is all too evident in the fast-shrinking share price.