MUMBAI India's top stock exchanges have postponed by two weeks moves to extend their trading hours, bowing to criticism from brokers who said the infrastructure needed for beginning trading earlier in the day was absent.
The Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) had planned to advance the start of trading to 9 a.m. (0330 GMT) from 9:55 a.m. from Friday -- a move that had been expected since the securities regulator allowed extensions of trading hours two months earlier.
But, on Thursday, a BSE spokesman told Reuters the BSE and NSE have postponed the earlier starts to Jan 4.
Brokers said the plans for starting trading earlier were a result of the two exchanges trying to outdo each other, rather than a well thought through plan to draw more investors to the market.
"In the rest of the world, they first see whether the infrastructure needed for this is in place. Here, the exchanges seem to be absolutely ignorant," said Deven Choksey, chief executive of K.R. Choksey Shares.
"By infrastructure I mean the banking and clearing systems, which are just not in place for a 9 o' clock start," said Choksey, who has been in the market for more than two decades.
The BSE is Asia's oldest stock exchange and the owner of the benchmark Sensex. But newer entrant NSE has stolen a march over it, and now has about 1,400 listed companies and boasts a daily turnover of $3.2 billion, treble that of the BSE. Both exchanges are unlisted.
For a graphic on the exchanges' turnovers click here
Frankfurt-based Deutsche Boerse and Singapore Exchange each hold 5 percent stakes in the BSE.
Goldman Sachs along with NYSE Euronext, private equity firm General Atlantic and Softbank's Asian infrastructure fund bought a 20 percent stake in the NSE for $490 million in 2007.
"The exchanges are commanding so much volume that they feel that they can take any decision," said Deena Mehta, who controls Asit C. Mehta Investment Interrmediates and was a member of the governing board of the BSE.
"Are exchanges representing the market participants, or are they representing only their shareholders -- those private-equity investors and foreign investors or whoever whose interest is that volumes go up and the incomes go up," she told CNBC TV 18.
The BSE, which has about 5,000 listed companies and is headed by 36-year-old Madhu Kannan, and the NSE said in a joint statement they had decided to postpone their earlier move based on "market feedback."
The NSE had said on Wednesday its decision to bring forward the start of trading was made after consulting market participants and reaching a consensus.
Some brokers said they wanted a break in trading for lunch, while others seemed to be preparing for what was seen as inevitable.
"We may ask some of our people, especially those who are bachelors to come in early. Eventually, everyone will have to come early," said Gajendra Nagpal, chief executive of Unicon Financial Intermediaries, which employs about 600 people.
(Editing by Muralikumar Anantharaman)
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