18
Dec
09

Yeh Dil Maangey More (BSE & NSE)

From Jan 4,2010, life of a large number of people will be affected in India. The alarm clocks will ring one hour before the normal timings. ShareKhan office will be crowded an hour before usual. Hawkers of Dalal Street will expect the breakfast customers just before 0900hrs IST. Yes, NSE & BSE has decided to wake up early on the first week day of the new year!

Some market players feel that it will

  • Help in reducing volatility
  • Improve Trading Volumes
  • Catch up trading in Hong Kong & Singapore (Controversial point as we can not eliminate the gap of above 2hours)
  • Greater overlap with Asian markets will reduce risk
  • in sync with the currency markets
  • Banks don’t open that early
  • Banking and other infrastructure are not able to cope with the changes in capital market

Brokers:

  • High operating cost
  • No rise in profits

Small brokerage firms are facing problems in particular, as there wont be any additional profit with the increase in the number of hours. Brokerage rates are also going down, so they feel that it would be difficult to cope up with the two crisis. Larger brokers will be benefited more.

The whole point of having an exchange is to let people convert information into money. The longer the trading hours, the less the pile-up of information that cannot be acted on. India’s domestic commodity exchanges already operate far longer hours (10:00 am to 11:30 pm). Many global equities markets trade for 6.5-7 hours, compared to about 5.5 hours in India. Euronext is open 24 hours a day(Source: Economic Times)

But who is gonna benefit from this more? Large Brokerage firms, Small brokers, Investors, Regulators, Banking System? Who?

What was the rationale behind this move? To reduce the gap of the other Asian markets?

We can not really say whether it is lucrative or not, unless and until it is actually implimented. Lets wait for 4th Jan to see the changes, how the market reacts? and to witness

BSE

the ultimate winner!

Apoorva Dixit

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3 Responses to “Yeh Dil Maangey More (BSE & NSE)”


  1. December 19, 2009 at 12:55 am

    One benefit for Institutional Investors that I can foresee is that, Market Impact Costs will be less for Institutional Investors, willing to liquidate large positions. They can do so, in a more staggered way over the longer trading hours.

    • December 19, 2009 at 1:03 am

      ohh! I missed this point. Thanks dude!
      We will discuss it once you come back to the campus! I have ICICI GD tomorrow, so thought of doing some analysis on this topic as I found it very interesting! Please keep on giving your valuable inputs and guide me towards gaining more knowledge!

  2. February 26, 2011 at 2:36 pm

    Nice
    Money Maker Financial Services


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