The Qatar Investment Authority yesterday snapped up a further 3 per cent of the London Stock Exchange’s shares as Nasdaq sold off its remaining stake in the British bourse for nearly £96 million.

The purchase came a day after Qatar took the stock market by surprise, acquiring a near 21 per cent holding in the LSE from two American investors after it failed to acquire the first, and biggest, tranche of the 31 per cent stake being auctioned by Nasdaq, the New York exchange.

LSE shares powered ahead to a new high yesterday, rising 113p to £18 in heavy trading. On Thursday, 28 per cent of the Exchange went to the Borse Dubai, Qatar’s rival in the region, despite a firm offer for the shares from Qatar. Qatar is understood to have bought most, if not all, of Nasdaq’s remaining 3.5 per cent LSE holding yesterday for £18 a share, in a transaction announced last night after the British bourse had closed.

The LSE share price is a long way ahead of the £14.14 that Nasdaq accepted from Borse Dubai and the same as Qatar paid. Although the share sale brought with it various other advantages to the American exchange, investors may question the low price at which the Borse Dubai sale was done when Nasdaq seeks their approval. However, Nasdaq is still thought to have made a profit of about £200 million.

The Qataris are supportive of the LSE board and its chief executive, Clara Furse, although it is not clear whether this support extends to blocking any unwanted takeover approaches from Dubai.

A further increase in Qatar’s holding to the maximum 29.9 per cent permissible without it having to make a full bid would make a takeover by Dubai difficult, if not impossible.

At the heart of the struggle for the LSE is the relationship being brokered between London and Qatar. The desert kingdom is keen to build up its fledgeling stock market in Doha by modelling it extensively on the London market.

Phillip Thorpe, who was involved in the creation of the Financial Services Authority in London, is already the main regulator for the Doha Securities Market. The Qataris are thought to be especially interested in the Alternative Investment Market, which is seen as the appropriate model for various stocks in Doha.

The Nasdaq stake was sold to Dubai as part of a wide-ranging deal between the two to acquire control of another exchange business, OMX, which operates in the Baltic and Nordic countries. This would involve Dubai taking a 19.99 per cent stake in Nasdaq. However, politicians in America have already indicated that they may oppose this part of the deal.

The Qataris have also bought 9.98 per cent of OMX and were last night forced to deny that they had increased this. A spokesman for the investment authority was quoted on Reuters as saying that both the OMX and LSE stakes were “strategic”.

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