The London Stock Exchange reported that business in the first half is booming, just days before American rival and 25.3 per cent shareholder Nasdaq is freed to launch another takeover bid.

In a pre-close trading update ahead of its first-half results, the LSE said that the amount of capital raised on the exchange doubled to £24 billion during the five months to the end of last month.

It said the average number of bargains on its SETS electronic trading system jumped by 58 per cent to 315,000, which was well ahead of its target level and came despite the expected summer lull in dealing.

The exchange, which has already rebuffed a $4.5 billion bid from Nasdaq as undervalued, also said the number of professional trading terminals receiving its real-time trading data had risen by 10,000 to 107,000 over the five-month period.

Clara Furse, the chief executive who has been fighting off sustained takeover interest for almost a full two years, said: "The exchange is thriving as we create increasing value from our world class brand, numerous growth opportunities in the market, and from our new and exceptionally fast technology, against a backdrop of declining costs.

"The strategic value arising from our market position and the continuation of very strong growth in our core business reinforce our expectation of an excellent trading performance this financial year."

But shares in the LSE gained just 1p to 1,236p as analysts and investors predicted that Nasdaq would not sweeten its offer.

Katrina Preston, an analyst at Bridgewell, said: "It will come as no surprise to investors that the IPO market remained strong throughout the summer, with the value of new issuance doubling, although 84 per cent of new issues were on AIM.

"However, we expect the primary market is at or close to a cyclical peak, with news of further IPOs being pulled (for example, Hogg Robinson) casting some doubt over the trading outlook."

Ms Preston added that while the shares do not look expensive compared with sector peers, "investors will need to have a high degree of confidence in a successful bid emerging to add to their holdings at current levels."

Nasdaq, which is the LSE's largest shareholder is free to bid on October 2.

The LSE's trading statement came as ICAP, the inter-dealer broker that emerged as a potential suitor over the weekend, also reported that it was on course to generate full-year profits of around £250 million and had benefited from the volatile market in May.

But ICAP's shares, which rose on its LSE interest, fell 9.25p to 511p on concern that its previously rapid growth was beginning to slow.

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