Brokers appeared to be divide over the proposal to extend the timing of stock trading up to 7.30 pm, with some arguing it will not increase volumes and be convenient to traders while others believe this will lead to overall development of the equity segment.
Brokers appeared to be divide over the proposal to extend the timing of stock trading up to 7.30 pm, with some arguing it will not increase volumes and be convenient to traders while others believe this will lead to overall development of the equity segment. “Without extending time and within same time frame exchanges can have more volumes as we are on very efficient technology platform. For brokers, there can be an increase in cost with extended time hours without any commensurate benefits,” said Arpit Jain, AVP, Arihant Capital Markets.
Leading bourses have proposed to extend the timing of stock trading up to 7.30 pm to better align Indian markets with global trends and boost business. Various proposals on the table include extending trade hours till 5 pm, 5.30 pm and 7.30 pm. “It’s an idea that needs to be nipped in the bud. The touch stone of any change in the capital market trading time needs to be investors need. Who is proposing this? Not investors. So don’t extend,” said V K Sharma, Head PCG & Capital Market Strategy, HDFC Securities.
Exchanges have earlier also proposed to extend the timings, but all such proposals have always met with a strong resistance from brokers while regulator Sebi has so far maintained a neutral stance and want any move to be based on views of all stakeholders, including bourses and market intermediaries. “… it needs to be understood that we are already working from 9 am to 4 pm counting the pre-open session and the post closing sessions. Who so ever wants to trade or invest can do this during this period. “So, extending hours will not increase volumes or be convenient to all traders. So, it is not going to help the exchanges either. But will be hugely inconvenient to investors,” Sharma added.
Exchanges feel that technology advancements have made it easier today to successfully follow a longer trading period and the reservations are misplaced against the move that would help better align Indian markets with global ones. “As a responsible broker who understands the needs of the investor, we believe there is no investor appetite for this. However, if the exchanges were to bulldoze investor concerns, and increase trading hours, we will offer the extended trading hours to all our investors,” he noted.
Currently, trading commences on the bourses at 9 am and closes at 3.30 pm, with 15 minutes each of pre-open and post- closing sessions. “Stock exchange extension will lead to overall development of the equity segment. Our markets are admired globally by investors and institutions, this step will prove to be a boon for overall stock market,” said Ritesh Ashar, Chief Strategy Officer, KIFS Trade Capital. “From brokers point of view most of the brokers are part of currency segment which works well till 5 so it will not be a cost addition for brokers with increased client servicing,” Ashar added.
Metropolitan Stock Exchange of India (MSEI) had in July issued a notice announcing extension of trading hours in the equity segment from 9 am to 5 pm. However, within a day of announcing the extension of trading hours up to 5 pm, MSEI withdrew the circular on the same. The Securities and Exchange Board of India (Sebi), in October 2009, had permitted the stock exchanges to set the trading hours between 9 am to 5 pm. The BSE and the NSE had advanced market open timing to 9 am in December 2009, from 9.45 am earlier.