MSEI action alone would not be enough for Bombay Stock Exchange and National Stock Exchange to extend the trading hours, but both said they will wait for the other main competitor to consider it.
With the Metropolitan Stock Exchange (MSEI) extending trading hours to 5 pm from Friday, India’s two leading stock exchanges BSE and NSE appear not to be considering any such move for now, but both said they will look into it if the other one moves first, according to television reports.
MSEI action alone would not be enough for Bombay Stock Exchange and National Stock Exchange to do the same too, CNBC TV18 reported citing unidentified sources at both the bourses. Both exchanges would wait for one another to do so first to consider extending trading hours themselves, the report added.
The TV report seemed to suggest that both the main stock exchanges are not warm to the idea, saying that they have had the option to extend trading time since 2009, but had decided not to do that for evening.
Metropolitan Stock Exchange, the erstwhile Jignesh Shah-promoted MCX-Stock Exchange, yesterday said it will increase trading hours till 5.00 pm, ostensibly in order to gain volume and market share. Notably, MSEI is a very small player with only a little over 200 companies listed on it, in a market dominated by NSE in cash and derivatives and by BSE in terms of breadth and experience.
Samir Arora, founder and fund manager of Helios Capital Management, called the move “stupid” in a tweet, saying that he hopes NSE and BSE ignore it. “Desperate move by a desperate exchange,” he posted in the tweet.
Both, BSE and NSE had extended trading hours in the morning to begin at 9.15 am with the pre-opening session opening at 9.00 am, from 9.55 am earlier, after SEBI allowed them to extend working hours from 9 am to 5 pm. Even that morning extension of trading hours at that time had met with a lot of opposition from brokers, who were more comfortable with the existing schedule.
Now, both NSE and BSE believe that extension by MSEI will not lead to any meaningful movement of volumes to it, CNBC TV18 report said. Further, both the exchanges also raised question over the utility of MSEI’s move saying that the price discovery of securities trading on MSEI will be tough as there are hardly any trading volumes on it. It must be noted that NSE commands over 80% of the equity cash and equity derivatives market, with BSE controlling 14%.
BSE and NSE also said that their pre-opening sessions would take care of any large discrepancies in the prices recorded during the late hours on MSEI the previous day.