Why Nick Train sees more gains for the LSE

AAA-rated equity star Nick Train is hopeful of continued gains in London Stock Exchange (LSE) shares, even after an 11% jump in December after striking a deal with LCH Clearnet.

Train (pictured) pointed out the new agreement allows LSE to snap up a majority stake in Clearnet and should bring about efficiency savings to boot.

This should translate into a continued rise of its shares, Train said, particularly if market activity improves.

'The 33% gain in the shares of the Osaka Securities Exchange in December alone (held in other LT accounts) shows what can happen to the value of quoted stock markets when promised efficiency gains combine with renewed optimism for a given market and a pick-up in dealing volumes,' Train said, pointing to Osaka's decision to merge with the Tokyo exchange.

'There should be more such gains for LSE, especially if market activity improves,' the manager added, and this should be good news for his CF Lindsell Train UK Equity fund, where LSE accounts for 6% of its net asset value.

Over the past three years, Train's shrewd calls on UK stocks have gone down well with investors and have seen Train return 68.6% versus 28.2% by the FTSE All-Share Index, according to Citywire data.

Train has also outperformed relative to the average UK equity manager.  While Train has delivered 68.6%, his typical UK all companies peer has returned 27.8% in three years.