Controversial Lunch Break Reduction in Hong Kong Stock Exchange

choi

Kate O'Keefe and Isabella Steger, For Brokers in Hong Kong, This New Policy Is Out to Lunch. Noontime Cessation in trading is sacred; Threat to dim sum and business chat. Wall Street Journal, Jan 19, 2012 (front page).

(a) Quote:

(i) Hong Kong Stock Exchange "wants to reduce its lunchtime trading break from 90 minutes to one hour. Until last year, the break lasted two hours.

"No major Western stock exchange has a midday break. While some Asian exchanges still cling to the tradition, Singapore's stock exchange scrapped lunch last year, and Tokyo trimmed the halt to one hour from 90 minutes.

"The New York Stock Exchange gave up its midday trading break in 1871, four years after the first stock ticker brought live prices to investors. A London Stock Exchange spokesman said he could 'find no record of a formal lunch break in modern times.' But given that there has been trading in London since 1698, 'there may have been at some point, but it would be very difficult to find that out.'

(ii) "The feud highlights a split in Hong Kong's financial community. while the world's biggest banks [and thus their hong kong employees,  including traders] occupy dazzling skyscrapers in the city's Central district, many stockbrokers [in hong kong boutique brokerages] work in storefront offices in crowded neighborhoods where their often elderly clients spend the [entire] day agressively trading stocks and socializing [and often having lunch with their stockbrokers to strategize].

(iii) "The brokers in Hong Kong do have one advantage over their brethren abroad--they work sitting down. Still some say working without a break in trading will be too much.

(iv) "Some brokers say that even if the lunch intermission is shortened, brokers won't trade during the new hours. Last year, the break, which had run from noon to 2 pm, was cut by 30 minutes, but trading volume hasn't increased.

"'The Fact is, no trading is happening from 1:30 to 2 * * * we are sitting around doing nothing,' said JojoChoi, chairman of the Institute of Securities Dealers. 'There is no market efficiency at all.'

My comment:
(a) Taiwan Stock Exchange (whose acronym changed from TSE to TWSE a couple of years ago, to avoid confusion with the other TSE: Tokyo Stock Exchange).
(i) Trading Hours
http://www.twse.com.tw/en/produc ... s/trading_hours.php
("The TWSE operates in a consolidated limit order book environment, where only limit orders are accepted. During the regular trading session from 9:00 am to 1:30 pm")

With this hours (presumably because TWSE is small relative to big bourses), there is no need for a lunch break.

(ii) Trading Mechanism
http://www.twse.com.tw/en/products/trading_rules/mechanism01.php
("Effective May 3, 1993, all securities listed on the Exchange are traded through Fully Automated Securities Trading ( 'FAST' )")
(b) NEW YORK STOCK EXCHANGE TRADING HOURS
http://www.nyse.com/pdfs/historical_trading_hours.pdf
(currently, regular trading: 9:30 am – 4 pm)
(c) Trading Calendar and Trading Hours. Hong Kong Stock Exchange, undated.
http://www.hkex.com.hk/eng/marke ... tradcal/tradcal.htm
(9:30 am to 12:00 noon and 1:30 pm to 4:00 pm)
(d) there is no need tio read the rest of the report.
(e) Just last week, I talked to a meter maid (a stytranger), "I have great respect for American government workers. You are very efficient. Taiwanese are not as bad as Spaniards. Still in lunchtime, there is nobody in government offices in Taiwan. For two hours, you can't have anything done."