Reinstatement of SGX lunch break unlikely to affect trading volumes: Nomura

Reinstatement of SGX lunch break unlikely to affect trading volumes: Nomura

File photo of the Singapore Exchange. (Photo: Edgar Su/Reuters)

SINGAPORE: Singapore stock traders will be able to enjoy their lunches without worrying about trading volume when they finally get their mid-day intermission back on Monday (Nov 13).

A report by Nomura on Friday said that trading volumes are unlikely to be affected much by the reinstatement of the lunch break.

Singapore stock traders had their 90-minute afternoon break wrangled from them six years ago in order to create a continuous seven-and-a-half-hour trading session, a move that was aimed at livening up the market and raising trading volume.

However, following public and industry consultations, the Singapore Exchange announced in July it would reinstate lunch breaks, but for 60 minutes between noon and 1pm.

A report by analysts at Nomura’s Instinet Pacific said trading volumes may not see a dip when the lunch break is reinstated – citing that trades that would have been executed during the one-hour break would likely be spread out over the trading day.

The report showed only 5.5 per cent of daily trading volume is executed during that one-hour window.

Half of that volume will likely go into the afternoon open auction session, and the remaining distributed equally in the hour leading up to and following the lunch break, they said.

“Based on historical experience we do not expect that a trading hour change will have a noticeable impact on total daily volume, but rather will result in a reallocation of the current noon to 1 pm volume to the PM open auction and the AM/PM continuous sessions,” the report said.

Source: CNA/ad