Monday, January 4, 2010

Brokers crib their way to office for 9 am start



MUMBAI: The hectic parleys of the broking community with the National Stock Exchange and the Bombay Stock Exchange in a bid to get them to defer
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the decision to start trading early didn't bear fruits.

The new year kicked off with new timings for the stock markets -- a 9 am start.

While bigger brokerage firms managed to bring round recalcitrant staffers by deciding to work in shifts, it was a struggle at smaller ones, with most scrambling for officers to man the terminals. While some firms arranged for food packets to be distributed among their staff, one had pick-up vehicles.

Kapil Mokashi, assistant manager at broking firm Sharekhan, said, "Though Sebi's decision to start the markets an hour early didn't come as a surprise, it did require some serious adjustment to schedules on our part. Since most of us live in far off places like Kalyan, Dombivli and Thane, commuting early is a difficult task."

The first-day first-show trade wasn't such a big hit, with brokerage firms recording no substantial increase in volumes. Emotions, though, ran high. "This will only lead to more headaches and stress and more heart-attacks. Real volumes will not increase, only speculative volumes will go up, which is not desirable," Himesh Bhatt, a seasoned broker, said.

While some dealers complained about leaving their homes at 6.30 am in a bid to ensure that they were at office in time for the early trade, other managers went to the extent of arranging lunch packets for their staffers. "Some of our staffers live in Dombivli," explained Mahendra Shah, proprietor of a brokerage house near CST. "They had to be at their terminal by 8.30 am. For that, they had to leave their homes by 7 am.
It's no time to be thinking of food."

Brokers of mid-sized and large brokerages who spoke to TOI said they would be working in three shifts from 6 am onwards. A trader with ICICI Securities said the office had arranged for pick-up vehicles for its employees.

But everyone didn't think alike. Dharmesh Mehta, head of equities at Enam Securities, said, "I see no logic in it (early trading) as there is no incremental benefit. Broking houses cannot increase their staff strength for one hour's extra trading session. We tried our best to oppose the move, but the stock exchanges have gone ahead." Even though staffers were allowed to leave by 5.30 pm at Enam, Mehta was sceptical if it would be possible in future given the pace at which work proceeds at brokerages.

Vikas Khemani, head of institutional equities at Edelweiss, said the move was meant to align Indian markets with global ones, but added, "I am of a belief that the volume is not going to go up because of the early trading." On a lighter note, Khemani said the early start shouldn't be a problem for those who had resolved to wake up an hour early this year. Stating that his firm would have two shifts, he said, "There are reasons which are rewarding enough for people to get motivated to come in early and put in extra work."

According to Sharekhan's Kapil Mokashi, with the markets currently having a bullish undertone, the new timings (9 am to 3.30 pm) wouldn't be very tedious. "But the real test of patience will come when we are trapped in a narrow range market with little movement through the day. Whether this was needed is still a debatable issue, but for the moment it will take us some time to imbibe this new schedule into our routine," he said.

Interestingly, the BSE Brokers' Forum had conducted a survey on the extended trading hours. It showed that 80% of those polled were against the new timings, with only 20% saying that it would not be cumbersome.

"Trading members clearly do not welcome the change as they see no benefit to the Indian capital market in terms of volumes of the Asian market or even to get an early trend of the US markets," Uttam Bagri, secretary of the BSE Brokers' Forum, said. The majority of the brokers polled also replied in the negative when asked if the change would see an increase in revenue vis-a-vis the rise in the costs.

Giving the issue a new angle, Sushil Agarwal, CFO, Aditya Birla Nuvo, said, "It might improve the traffic situation in Mumbai as a good amount of traffic will start early rather than everyone starting at the same peak time hour."

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