Stock Exchange changes designed to lift liquidity

By ELLEN READ markets writer

A sleep-in and potentially a lighter wallet are on the cards for the country's stockbrokers when the Stock Exchange changes its trading hours and prices on July 1.

The shift in trading hours - to 10am-5pm from the present 9am-4pm - is an attempt to improve liquidity and encourage the flow of company information to the market.

It also gives an extra hour of overlap with the Australian market at the end of the day.

"This new time will maximise the volume of trades in New Zealand companies on their home exchange," exchange market development manager Geoff Brown said.

"It should increase liquidity in the New Zealand market," he said.

Companies will be asked to release profit announcements before 8.30am to give the market time to digest the news before trading opens.

Brokers were largely nonplussed by the move, saying the change in hours was not a problem, although some were sceptical about whether it would increase liquidity.

"I have no real problems with that, it's been well signalled," one broker said. Although there was some division in the broking community, he said, the exchange had consulted extensively and had probably received lots of different views.

"Someone had to make a decision in the end," he said.

The exchange also is changing its pricing structure to recover costs associated with trading and settlement and start charging for value.

Chief executive Mark Weldon said the present fees were out of step with international standards and meant the exchange was possibly the only global exchange to make a loss on its trading operations.

"The drive to be a low-cost market operator forced the exchange to provide many of the services it offered for little or no cost, which, moving forward, would inhibit the organisation's ability to develop and grow," Weldon said.

The new fees will lower the cost of on-market trades at the expense of "marriages" - deals done by brokers between their own clients, bypassing the market. Listed company fees will remain much the same.

The exchange made more than $5 million in revenue during the six months to December 31, but Weldon could not say how much the new structure was expected to yield.

The exchange will list itself later this year, so it needs to make sure its financial information is released in the correct way.

Key pricing changes - to be finalised this month - include:

* Revision of transaction pricing to eliminate all per order charges (currently 10c per order), and increase the base trading charge from $0.60 to $1.00 a trade.

* Introducing infrastructure and transactions fees for registries.

* Lowering membership fees, portions of the infrastructure charges and order fees.

* Revising overseas issuer listing fees.

* Simplifying main board listing fees and adjusting the minimum fee.

Both sets of changes will come into effect on July 1.

The trading hours will be reviewed in January of next year.