Bse,Nse to start at 9,from 4th jan

Markets to start trading at 9 am from 4th Jan.

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. Brushingoff 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.

IMPACTS ON OTHERS

Retail Broking Houses

Dealing and risk management staff will have to start the day earlier. Firms’ overhead costs will rise. Most retail investors place orders in the first and last 30 minutes of trade. Those giving trade orders between 10 and 10:30 am may now do so between 9 and 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 move to advance trade timing will benefit 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 that it has increased timings to help market participants react to global developments faster

Timings around the globe of other markets

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 — 15:00 pm

NYSE Euronext: 9:30 am — 4:00 pm

LSE: 8:00 am — 4:30 pm

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