Singapore Exchange Ltd., operator of the city’s derivatives and securities market, will scrap its midday trading break from March as it seeks to increase its regional role.
Australia, South Korea, the Philippines, India, Sri Lanka and Bangladesh already operate without a lunch interval. Singapore’s trading day now runs from 9 a.m. to 12:30 p.m. local time, followed by a 90 minute break and an afternoon session between 2 p.m. and 5 p.m.
“To require staff to work without a break is a little taxing on the dealers,” said Chan Tuck Sing, executive director of UOB-Kay Hian Pte., a unit of Singapore second-biggest lender. “There could be a higher incidence of error and it could also increase their stress levels. That’s not good for the health.”
Singapore Exchange, Asia’s eighth-largest equity market, announced in October an A$8.4 billion ($8.3 billion) takeover bid for ASX Ltd., Australia’s main exchange operator. Hong Kong billionaire Li Ka-shing’s Hutchison Whampoa Ltd. said yesterday it plans to list some of its port assets in Singapore in what may be city’s biggest-ever share offering. The island nation is Asia’s largest oil-trading hub and is the world’s second-busiest container port after being overtaken by Shanghai last year.
The decision to cancel the adjournment was made after a consultation from Oct. 19 through Nov. 9 revealed support for the change from investors and brokerages, bourse spokeswoman Magdalyn Liew said. Details of the feedback received during the consultation won’t be released publicly, she said.
Boosting Trading
By eliminating the pause for lunch, Singapore Exchange is going further than larger rivals. The Tokyo Stock Exchange said Nov. 24 it will shorten its midday break to one hour from 90 minutes. That followed the announcement by the Hong Kong Exchanges & Clearing Ltd., operator of Asia’s third-biggest stock market, on Nov. 22 said that it plans to cut its two-hour adjournment in half and start trading 30 minutes earlier.
“Investors are constantly seeking trading opportunities, and continuous all-day securities trading will provide more avenues for participants to invest, hedge and arbitrage their investments,” bourse Chief Executive Officer Magnus Bocker said yesterday. “This will make Singapore one of the most accessible markets in Asia and in the world.”
Bocker has also taken steps to increase the market’s allure by introducing 19 American depositary receipts of Chinese companies and investing S$250 million ($194 million) in an order-processing system that may be the world’s fastest when it starts this year. Eliminating the break could boost trading volume by between 8 percent and 10 percent, he said in July.
‘Need to Relax’
“I don’t think scrapping the lunch break will have significant impact on trading volumes,” said Ng Soo Nam, Singapore-based chief investment officer at Nikko Asset Management Co., which has $123 billion in assets globally. “I’m not going to trade more just because it’s longer trading hours. We still need to go for lunch and relax.”
Restaurant operators in the Raffles Place financial district are concerned their business will be hurt by the change. There are 30 securities trading firms operating in the city-state and more than 4,200 trading representatives working at these companies, according to Singapore Exchange’s Liew.
Rozie Pledger, the manager of Harry’s @ Raffles Quay, said she’s concerned that the change may reduce her regular lunchtime crowd of brokers, traders, bankers and lawyers.
“In business, yes, you wonder what will happen,” she said from behind the bar of the downtown pub.
Still others are optimistic their business will adapt to the change. Osvaldo Forlino, who opened the No Menu Italian restaurant yesterday in the heart of the business district, said he’s not concerned about the impact the change may have on his business.
“Today I saw many of my customers working at the table with their Blackberry,” the Michelin-starred chef said. “For my business nothing will change because we have 40 seats, so it’s easy to fill. We are human, we need a one-hour break.”
‘Bygone Relic’
Bocker said in statement that increasing trading hours will help the exchange meet its customers’ needs. The nation’s biggest stockbrokers DBS Vickers Securities, OCBC Securities Pte and UOB-Kay Hian are all offering electronic share trading services, according to their websites.
“Lunch breaks during the trading day are a relic of days gone by,” Larry Tabb, founder and chief executive officer of Westborough, Massachusetts-based research firm Tabb Group LLC, said in an e-mail. “Since machines are increasingly managing executions, and the volume of trading is steadily increasing, there is increased demand to trade through the lunch break.”
The change will also align Singapore trading more closely to that of ASX Ltd., which operates from 10 a.m. though 4:10 p.m. local time in Sydney without a break. The Singapore bourse said the Australian anti-monopoly regulator had no objection to the bid, and it’s working with other authorities, including the Foreign Investment Review Board, with the aim of completing the transaction this year.
The combined entity would become the Asia’s fourth-biggest exchange, data compiled by Bloomberg showed. That will enable Singapore to vie for bigger IPOs after Hong Kong attracted Asia’s biggest initial public offerings last year.
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