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CSE trading hours extension on hold

4 months ago

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  • Decision to be reviewed soon
  Despite previously announcing plans to extend trading hours at the Colombo Stock Exchange (CSE) to three hours from 1 October, it appears that the CSE will not be pursuing such an increase in the near term. Speaking to The Sunday Morning Business, CSE Head of Marketing Niroshan Wijesundera revealed that there were no plans at present to expand CSE’s trading hours. However, he admitted that the CSE intended to review the decision in October. This represents a change of heart on the part of the CSE, as CSE Chairman Dilshan Wirasekara last week revealed to The Sunday Morning Business that there was a plan to extend trading sessions to three hours from 1 October 2022 onwards. “We extended by 30 minutes recently and we are hoping to extend it by another 30 minutes from 1 October onwards to see how that pans out. We will gradually revert to a four-hour trading window very soon,” Wirasekara stated at the time. In mid September, the CSE extended trading hours by 30 minutes to two-and-a-half hours of regular trading. Accordingly, the pre-open session was from 9.30 a.m. to 10 a.m. and the open auction was at 10 a.m. Regular trading commenced at 10 a.m. after the open auction and stopped at 12.30 p.m.   The CSE has so far adopted a cautious approach in terms of expanding trading hours and returning to regular hours, following the restriction to two hours in March 2022 in the face of worsening energy disruptions on or around March 2022 amidst the collapse of the Sri Lankan economy, which dealt a severe blow to the market. Wirasekara justified continuing the short session, pointing out that the country was still enduring power cuts of at least one hour per day, while the fuel quota was preventing people from utilising their personal vehicles and thus 30-40% of staff engaged in brokering activities were still working from home.  Speaking to The Sunday Morning Business, First Capital Holdings PLC Head of Research for Investments, Fixed Income and Equity Dimantha Mathew stated that while the market was now mostly used to the current restricted trading hours, it could lead to situations where certain traders would not have sufficient time to study the market, which could have a negative impact on volumes. “A trader employed full-time looking at the market online will only have a very narrow window in which to trade. If I were to trade through my broker, I would have to call him within this narrow window of two-and-a-half hours. Sometimes it’s very difficult to get through to brokers. Therefore, many orders may be missed,” he explained. He also pointed out that the restricted trading hours were not favourable from a macro point of view, because as a regulated money market the CSE should be implementing international best practices, adding that the current hours were behind the global average. – By Shenal Fernando   

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