A maturing market amid the mayhem
BSE vs NSE: Who wins with extended market hours?
Market participants will soon have to reschedule their morning routine as Indian bourses — the BSE and NSE — are set to extend their daily trading time by 55 minutes from January 4, 2010.
The markets will now open at 9 am and close at their normal closing time of 3:30 pm, but the question is — who would actually benefit with this move? Is it becoming more a battle between the two exchanges to win market share?
It all started after the Securities and Exchange Board of India allowed exchanges to operate between 9 am and 5 pm. On Tuesday, the BSE was the first to move as it said it would advance its market opening time by 10 minutes from Dec. 18, saying it aimed to increase investor focus in the derivatives segment.
The NSE on Thursday announced it was advancing opening time by 55 minutes to 9 am from Friday. The BSE followed suit.
But now the bourses have decided to start with the new timings from January 4 after criticism from the broker community.
These changes have got mixed reactions from the investor community and brokers.
In fact, the brokers were never in favour of such a change. A poll conducted by the Association of National Exchange Members of India had earlier revealed that 62 percent of the polled brokers were not in favour of extending trading hours. A similar survey by the Bombay Stock Exchange Brokers Forum said that 79 per cent of the members were against the extension.
Before the bourses decided to postpone the date to January 4, Samir Arora of Helios capital told a TV channel that it was an “arrogant move on part of BSE, NSE”. An expert also called the exchanges “insensitive”.
The NSE, which has about 1,400 listed companies boasts a daily turnover that is three times that of BSE, which has over 5,000 listed companies.
Many questions remain unanswered — How would banks open this early? Can brokerage houses put a system in place to cater to the needs of their clients? How would margin funds be made available to clients early in the morning?
Concerns remain over whether a proper system is in place to handle the change in hours, market players now have a little over two weeks to gear up for new timings.
What do you make of this move and who do you think stands to gain the most?