NYSE considers opening earlier
By Andrei Postelnicu in New York
Published: January 14 2005 22:56 | Last updated: January 14 2005 22:56
The New York Stock Exchange is exploring the possibility of opening earlier in the day, with the aim of capturing trading volume from European exchanges, notably London, which is five hours ahead of New York.
The idea, which is at a very early stage, is among several options being canvassed within the world's largest stock exchange in its drive to diversify revenue streams.
Catherine Kinney, NYSE president and co-chief operating officer, said in an interview that the exchange's management has had “brainstorming discussions about an earlier open” as part of this broader ambition to boost revenues. But, she cautioned: “We don't yet know whether we can do it.”
The NYSE might also explore ways to trade ordinary shares in European-listed companies and not just their US-listed American Depositary Receipts.
In addition, according to Ms Kinney, the NYSE was also looking to boost its exchange-traded funds business and had sought an agreement with the Securities and Exchange Commission to expand trading in corporate bonds.
The NYSE's internal discussions come as the London Stock Exchange is facing a period of vulnerability. A possible merger with either Deutsche Börse or Euronext, the German and French exchanges, would bring management upheaval and require the integration of trading systems.
The LSE said in 2002 it was planning to lure non-US companies that had been put off by the stringent provisions of the Sarbanes-Oxley Act to list shares in London. John Thain, the NYSE's chief executive, has often spoken of the need to find new sources of revenue if the exchange is to demutualise.
Mr Thain has also led debate on the harmful effects of theSarbanes-Oxley Act in deterring non-US companies from a Wall Street listing.
Any attempt to increase the NYSE's share of trading in European stocks would mark a response to a slowing stream of new listings from across the Atlantic and would be the only growth prospect for the NYSE there. The NYSE already enjoys a steady stream of Asian listings and the ADRs of many Latin American companies trade in higher volumes on the NYSE than their primary shares do in their home markets.
The revenue-boosting efforts at the NYSE coincide with a campaign to reduce sharply costs and increase efficiency, led by Amy Butte, chief financial officer.
Currently, the NYSE's trading session begins at 9.30am and closes at 4pm, while London trading begins at 8am and ends at 4.30pm (11.30am in New York).
In Frankfurt which is six hours ahead of the US east coast trading begins at 9am. Electronic trading closes at 5.30pm and floor trading at 8pm. Trading volumes in Europe typically increase after the NYSE market opens. On Wall Street, heavy trading volume in the morning is seen as evidence of activity by non-US investors. |
