Technical view by Nooresh

BSE/NSE and SEBI —- 3 idiots !!! – No sense in changing timings

BSE/NSE are exchanges which are ought to make money and every new board is just looking towards increasing the volumes then efficiency !!!

The flow of news :
- > SEBI allows exchanges to extend timings !! - ( Was the proposal taken forward by brokers or exchanges ?? ... obviously exchanges )
- > BSE changes timings by 10 mins ( God Damn it 10 mins can change BSE fortunes no it cannot,many products could not)
- > NSE has no other option and rather then playing the bidding war in time it takes it to 9 a.m ( SEBI permitted 9 am start )

What are the reasons :

-- > SGX Nifty
-- > Global Indices
-- > Volumes
None of the above can be justified.
- > SGX Nifty traded 10k contracts today in December series and 2 contracts in January. Whereas Nifty futures traded 5 lakh + contracts. and 29k in January. This shows in value basis NSE trades on an average 6-12 times what SGX does. ( rough calculations )
- > Above all SGX starts at 8 am so no matter what, there is going to be no induction of volumes from SGX to NSE. BSE has no futures volumes as such. Also majority of entities participating SGX might be bcoz they dont have a direct way to NSE.
-- > In any case Indian exchanges cannot start before Asian Indices ( 8 am ) and neither stay to see the end of Europe or start of USA ( 7 pm or later ). There is no case to tweak times or else you go to the government and get Indian Standard Time ( IST ) changed.
-- > What could be the impact of 1 hour on the volumes??? Statistically nothing major but the amount of cost which goes in keeping it on for one hour more is too high to compare the increase in volumes.
-- > The cumulative cost of 1 hour with X no of offices will definitely be a major dent to institutions. ( Dunno how early would depositories open up in this case ?? )
World over markets only work for 4-7 hours on an average. U S does for 6 1/2 , Europe 8, Asia 4-6 hours. Index futures may remain open for 24 hours but thats pure electronic and no physical transaction. So increase timings for Index futures to 24 hours !
China and Hong Kong even have a lunch break in between !!.
So whats the sense in increasing timings by 1 hour or even 2 hours - I would say NONE apart from some EGO issue in the exchanges.
There are many questions on how are they gonna do it.
-- > How early would the depositories have to open up ??.
-- > How would banks cope up with Margin settlements.
-- > How would small brokers cope up.
The list goes on.
Solution :
This is not a solution which anyone would back but as per a simple analysis.
Majority of the intra day volumes happens in 1st hour and last 30-45 mins of trade because its a fresh and end session. So volumes increase because its START and END.
Ideally volumes would increase if we have a break in between as this would create 2 STARTS and 2 ENDS.
So increase the time by 1 hour and keep a 1 hour lunch break.Amount of system time would remain same but volumes would definitely increase....
Ideally nothing needs to be changed. BSE/NSE should also work in participants interest ( institutions,retailers) then in their interests of volume increase. Have we seen any announcements on how to get back the even 5 % of the 58k crore worth of de-listed comapanies or SYSTEM PULL UPS On RIGGING .... None
As a participant in the markets this is my view which might be shared by all .... So read and pass around for more viewpoints on this.
No stock or index updates as nothing meaning ful is happening in the last 2-3 sessions. Lets wait for markets to decide the next move and we would react!! then predict.
Best Regards,

Article by Nooresh Merani

Nooresh has written 2531 articles.

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{ 3 comments… add one }
  • Ashish December 18, 2009, 06:13

    well written post..just tell me something…lets assume for a bit that volumes increase – how in the world does BSE or NSE benefit out of that(unless they were traded entities themselves)?

  • Sujatha December 18, 2009, 07:56

    Very good title and valuable inputs..

    Can you please post this article in any "Financial Papers", so that it can reach millions of people.


  • Anonymous December 25, 2009, 16:53

    I want to quote your post in my blog. It can?
    And you et an account on Twitter?


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