Dealers lobby to cut European stock trading day
By Huw Jones
LONDON, Feb 18 (Reuters) - Fund managers and investment banks are lobbying Europe's top exchanges to cut their stock trading day by an hour, a move campaigners say would save money, improve share prices and enhance their quality of life.
``It may have been a London-initiated move, but I believe we have pan-European support,'' said Martin Ekers, head of equity dealing at Morley Fund Management, part of Britain's biggest insurer CGNU (quote from Yahoo! UK & Ireland: CGNU.L)
``I am reasonably hopeful,'' Ekers said.
Initial contacts with Franco-Benelux bourse Euronext have been ``supportive'', but there has been no response from the London Stock Exchange (quote from Yahoo! UK & Ireland: LSE.L), and the Deutsche Boerse has not been approached yet, Ekers said.
The financial industry, reeling from a slump in stock markets and dwindling corporate activity over the past two years, is cutting costs as the dream of round-the-clock trading melts away as fast as a dotcom share price.
The London Stock Exchange, Euronext , the Deutsche Boerse and several other exchanges in Europe start trading at 0800 GMT, with most shutting at 1630 GMT.
Ekers said the European Trader Forum, which meets in Barcelona this week, will discuss trading hours, but there is already broad support across the industry.
Campaigners want trading to begin half an hour later at 0830 GMT, and end 30 minutes earlier at 1600 GMT, which would still leave Europe with a trading day one hour longer than the United States, the world's biggest equity market.
Ekers said volumes in opening trade at present are ``dire'', and regulators are concerned about the quality of the market at the open and close.
``Shorter hours would enhance liquidity and enhance quality of life,'' Ekers said.
Even with an hour shorter trading day, dealers and analysts say they would still come in at 0700 GMT or earlier to read up on market-sensitive news before the open, and must stay after the official close to tie up loose ends.
BOURSES GUARDED
Several stock exchanges have extended trading hours in Europe in a bid to keep trading in key stocks from shifting sooner to New York, and to attract small investors who trade online after work.
But the market pullback sent small investors scurrying for cover, leaving brokers twiddling their thumbs as they watch light evening trade in Stockholm, Helsinki, Milan and Frankfurt.
The London Stock Exchange, Europe's biggest equity market, said it listens to what the market wants and keeps opening hours under review, but there are no firm plans for change.
Euronext was not able to comment immediately, and the Deutsche Boerse said there has been support for its extended opening to 1900 GMT.
Frankfurt is discussing a 1630 GMT intra-day closing auction, with trading then continuing until 1900 GMT, but no decision has been taken.
Stockholm had been opening until 1900 GMT but was forced to shorten the trading day to 1630 GMT. The Helsinki bourse shuts at 1900 GMT, but from April the close will be brought forward an hour.
Ekers said he has received support from some staff members at several banks and funds, including ABN AMRO , Credit Suisse First Boston , Deutsche Bank , HSBC (quote from Yahoo! UK & Ireland: HSBA.L), Lehman Brothers (NYSE:LEH - news), Merrill Lynch (NYSE:MER - news), Morgan Stanley (NYSE:MWD - news), Schroder Salomon Smith Barney (NYSE:C - news), UBS Warburg , AXA , SocGen Asset Management and Aegon .
Many of the big banks are shareholders and key players in the stock exchanges, but changing opening hours may prove tricky when Europe's top exchanges are now publicly listed and less beholden to their members. |
