Brokers hail breather in trading hours extension

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Trading Hour extension: Is corporate governance an issue? Why experts say NO to extended trading hours now? Advancing mkt opening to 9am, an arrogant move: Samir Arora ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets

The leading stock exchanges in the country, the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) are making news for all the wrong reasons. After the Securities and Exchange Board of India (SEBI) gave its go-ahead to extend trading hours to a maximum possible window of 9am to 5pm in a bid to attract more trading from international investors, the BSE on Tuesday pulled the trigger when it decided to advance opening bell by 10 minutes to 9.45am from December 18.

The NSE resorted the next day by saying it would open its equity market from 9am, following which the BSE too came out with a similar announcement.

The manner in which the announcements were made was sure to have left the investment fraternity in India high and dry - what with the disregard to the fact if brokerages were ready with the infrastructure. In fact, in an interview, the NSE Chairman, Ravi Narain, admitted that exchange had "no choice" but to retaliate to BSE's move.

On Thursday, both exchanges said the decision to start trading early was being postponed to January 4, a move that might have been a result of SEBI frowning upon the timing war, and something that would be a relief to the financial community.

In a discussion on CNBC-TV18, leading brokers came together to discuss the issue. ENC Palaniappan, President of Association of National Exchange Members of India (ANMI), said its member brokers would express their concerns to the exchanges regarding infrastructure issues they may face. "A majority of our members are not in favour of it," he said.

Enam Securities' Dharmesh Mehta said there could still be more change of heart in store and that the extension may not yet be a done deal. "At least, the exchanges have moved to move this back to January 4, 2010. That gives more time for discussion. The views of all market participants will now be considered."

Terming the postponement a "good development", leading broker Dipan Mehta, a member of both BSE and NSE, said extend trading would put more stress on the people working at the terminals. "Such a decision needs to be given more time to be deliberated upon," he said.
Mehta doubted if the more hours would resulted in more trading volumes.

"In any case, most offices - be it broking houses, fund houses, insurance companies, banks - start work at 9am and there is preparatory activity to be done before the market opens," he said. "[In the new schedule], every single participant will anyway start his operations 30-40 minutes or one hour before the market opens."

Read the transcript of the panel's interview on next page