NYSE looks at plan for longer opening hours

NEW YORK - The New York Stock Exchange is considering a plan to open trading as much as two hours earlier to attract more business from overseas, NYSE chief executive officer John Thain says.

Thain said the NYSE, the world's largest exchange, wanted to make a decision within the year.. Trading now begins at 9.30am and ends at 4pm.

"We are considering the expansion of the hours," said Thain. "It would probably be just an hour or two at the beginning or the end, more likely at the beginning."

Thain is trying to preserve the NYSE's market share of trading in its own listed stocks, which slipped below 80 per cent in November for the first time in seven months.

He is also grappling with a plan to mesh electronic and manual trading to fend off all-automated competitors such as the Archipelago Exchange.

NYSE seat prices have fallen by more than half since their August 1999 peak of US$2.65 million ($3.72 million) as the US Securities and Exchange Commission rewrites rules governing trading.

Thain's plan has supporters among some European investors. Others, such as Leif Millarg, who sells US stocks to European clients at Atlantic Equities LLP in London, remained sceptical that the change will make a difference.

"It doesn't automatically mean trading activity will go up," Millarg said. "Volumes will remain the same, just be spread over a longer time period."

The NYSE has tried and failed before to extend trading hours.

In 1991, then-chairman William Donaldson proposed opening at 9am. Donaldson, who now heads the SEC, had to back down, partly because West Coast brokers didn't want to start trading at 6am their time.

Donaldson's successor at the exchange, Richard Grasso, said in 1999 he envisioned trading that could extend to between 5am and midnight New York time. He eventually dropped the idea.

The NYSE's current trading hours have been in place since 1985. On September 30 of that year, the NYSE moved up its opening from 10am. Archipelago aims to open by 4am New York time for US stocks as early as March.

Thain, a former co-president of Goldman Sachs, also ruled out joining with the London Stock Exchange and said he expected US exchanges to combine.

He saw no "synergy" in a NYSE combination with the London Stock Exchange. The London exchange has rejected a takeover offer by Germany's Deutsche Boerse.

"I don't see the same types of synergies between the US market and the London market that are being talked about at the moment," said Thain. "There is plenty to do in the US market right now."

- BLOOMBERG