GET, SET, TRADE @ 9

M O R E T I M E O N D - ST R E ET

It is not quite the kind of start to the new trading year that most stock market professionals in India would have looked forward to. Brushing off widespread opposition from brokers, particularly the smaller ones, to longer trading hours, the two major exchanges — NSE and BSE — have decided to advance market hours by 55 minutes to 9:00 am.Who will eventually benefit from this move and who are the losers? A quick check on how different categories of market participants will be impacted by the increased trading hours.

What does longer trading hours mean for... 
Retail Broking Houses 
Dealing and risk management staff will have to start the day earlier. Firms' overhead costs will rise, without much rise in business. Most retail investors place orders in the first and the last 30 minutes of trade. Those giving trade orders between 10 & 10:30 am may now do so between 9 & 9:30 am 
Foreign Broking Houses 
Will not have to work longer hours since staffers in these firms anyway reach office by 7:30 am and hold meetings to chart out the plan for the day. The morning meetings are likely to be shorter. As with Indian retail broking houses, foreign ones too may not see a significant jump in business volume 
Institutional Investors 
The advancing of trading time is beneficial to foreign fund managers who track India sitting out of Hong Kong or Singapore, as the trading hours overlap. This will still not lead to foreign fund houses investing more in India, because their capital allocation for individual markets are usually fixed. That is also the case with domestic MFs, except that fund management teams will have to start the day early 
Retail Investors 
Will not make much of a difference to them, except that many will now be able to place their orders while commuting to work, instead of after reaching their work place 
Day Traders 
Will trade more simply because they are in front of the trading terminals from market opening till close, trying to spot arbitrage opportunities. Since it is very tiring, some broking houses, specialising in arbitrage trades, may decide to work their dealers in shifts 
Banks 
More banks will have to open by 8 am, if they want to retain business from big stock brokers and HNIs. Margin funds have to be deposited with bourses at least 30 minutes before trading starts. During volatile phases, there is often a sudden demand for funds early in the day, which banks have to meet 
Stock Exchanges 
Exchanges collect a transaction fee from brokers. The higher the volumes, the more the fees. Increased timings will help both exchanges by way of incremental transaction fee. The exchanges deny this is their motivation. The NSE has all along said it has increased timings to help market participants react to global developments faster 
TIMINGS 
AROUND THE 
GLOBE 
Singapore SE 
9:00 am — 12:30 pm & 2:00 pm — 5:00 pm 
Hong Kong 
10:00 am — 12:30 pm & 2:30 pm — 4:00 pm 
Tokyo 
9:00 am — 11:00 am & 12:30 pm — 3:00 pm 
NYSE Euronext 
9:30 am — 4:00 pm 
LSE 
8:00 am — 4:30 pm