Reacting to reports that the Indian bourses may allow trading on Saturdays, officials of the NSE and the BSE said they have not received any directive from the regulator on the issue.
There have been reports that stock exchanges here are contemplating increasing the number of working days in the week from five to six, apparently to align with markets in the US and Europe.
The US market closes early Saturday morning while Europe closes late Friday night as per Indian standard time.
Experts pointed out that the Indian markets react to global clues, though those markets are not materially impacted by the Indian bourses. So when dealers do not receive global cues on a Saturday, they may not trade the way they normally do.
“It is interesting to note that the FII volumes in the Indian markets are significantly low on days such as Thanksgiving day when US is closed and India open,” said the Head of Research of an Indian brokerage.
“Even if DIIs do participate what can one achieve when other markets such as the fixed income and currency markets are closed?” he asked.
Market-men are of the view that this move would wipe out the smaller broker as he/she would not be able to generate significant revenue while incurring additional cost of operations.
Speaking for the investor community, Mr Arun Kejriwal, Founder, KRIS Research, felt, “This is a backdoor entry to kill 80 per cent of the brokers who contribute 20 per cent volumes across the two exchanges.”
“Given that the average travel time for a dealer in Mumbai is 90 minutes, he begins his day at 7:30 a.m. and invariably reaches office without having breakfast. Plus he has lunch after market hours. If one more working day is added to his weekly schedule, it becomes an ordeal as there is no guarantee of volumes on a Saturday,” said Mr Kejriwal.
Experts said that it would be wrong to assume that volumes are a function of number of trading days in a week.
“Volumes are a function of the interest levels of market participants and not the number of days,” said Mr Prakash Diwan, Head – Institutional Client Group, Asit C Mehta Investment Intermediates.
Those in the street point out that brokerages might face a situation where they either have to increase manpower for incremental work or raise salaries of existing employees. Neither would be possible in a market where revenue is already shrinking, they said.
And though institutional participation may come from mutual funds, PSU institutions may not remain open on Saturdays for trading, said experts.
Banks may also not provide funds pay in and pay out services on a Saturday, they said.