New start: 9 am trading from Jan 4

BULLISH ON EARLY TIMING?

Under Pressure From Sebi And Brokers, BSE & NSE Postpone New Timing

Mumbai: Come January 4 and Dalal Street will have to wake up to a new dawn. On Thursday, under pressure from the market regulator Securities and Exchange Board of India (Sebi), both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), decided to defer change in market timings to January 4 from Friday, a day that these bourses had decided on earlier. From January 4, which also happens to be the first trading day of 2010, markets will start at 9 am, instead of 9.55 am now. 

    The change of decision, however, was preceded by high drama and controversies over the last three days. And interestingly, even after the Sebi brokered the decision to defer the change of timings by about two weeks, politicians have joined in the controversy. 
    On Tuesday, BSE had announced that from Friday markets will start from 9.45 am. On Wednesday, irked by BSE's unilateral decision, NSE said it would also extend trading hours and start the market at 9 am. BSE then also had to fall in line and start trading at 9 am. 
    The broking community, however, had their doubts about the infrastructure that could ensure smooth changeover to new timings and approached the regulator. Heeding to market participants' pleas for intervention, on Thursday morning Sebi called an emergency meeting of the two bourses at its office. While Ravi Narain, MD, NSE attended the meeting, from BSE, it was Madhu Kannan, its MD & CEO. Later, both the bourses announced that the change of timings was being postponed by two weeks. The official line was that the decision was based on 'market feedback'. 
    Brokers alleged that the decision to extend trading hours will surely increase their cost of running offices, but there was no guarantee that their income from broking will go up to at least match the rise in expenses. Some brokers even alleged that the decision by the two bourses, in which several private equity funds and foreign bourses have stakes, were prompted by higher returns for these shareholders. Amid the controversy about extending trading hours, politicians have joined in, taking the side of small and mid-size brokers. 
    Milind Deora, a Congress MP from Mumbai, wrote to the finance minister urging him to 'encourage' Sebi and the two bourses to consult the stakeholders before actually extending the trading hours. "I have received numerous petitions from small and medium brokerage houses regarding this matter, hence I thought that it was necessary to take this matter with the honourable FM,'' Deora said. Not to be left behind, former MP from Mumbai and investor activist Kirit Somaiya too wrote to the FM alleging that trading hours was 'lopsided and taken in a horrible manner'. He also said that he had interacted with Sebi and there does not seem to be any logic behind such extension. He further added that computer networking infrastructure and the banking system were not fully geared to "support such long trading hours from 8 am to 5.30 pm".