By Xavier Kong
BURSA Malaysia found that there are minimal arguments to support the proposition that shorter trading hours will benefit the workforce in the industry and the market in general.
The move was first proposed due to concerns about the health and well-being of the employees who are required to travel during the Movement Control Order (MCO) period.
“The consideration for shorter trading hours mainly centres on the health and well-being of the employees of participating organisations having on-site access to the trading systems during the MCO,” says Bursa to FocusM.
Following the decision to keep market hours as they were, Bursa has instead provided guidance to stakeholders on deploying work-from-home initiatives effectively, stating that “our markets have continued in an orderly manner, operating without any disruption.”
A survey conducted by Bursa concerning shorter trading hours also indicated that dealers and remisiers have been given the option to work from home via the mobility rules which have been implemented since 2018, with the exchange also sharing guidance on system access with the industry, thus facilitating the effectiveness of staff working from home.
“Most recently, we have also encouraged market participants who provide counter services to their clients and customers to limit their respective counter service hours to between 10am and 3pm during the MCO,” says Bursa.
The exchange operator also noted that it remains vital for markets to remain open to ensure continued and reliable access to the Malaysian capital market, “which is vital for immediate and long-term market confidence.”
“Continued operations of our market are critical towards providing uninterrupted access to both local and foreign investors. Uninterrupted market access is also vital towards supporting the greater ecosystem within the financial market. Therefore, closing the market is not a solution to mitigate the impact of this unprecedented event,” says Bursa, referring to the Covid-19 pandemic.
Additional measures to ensure the markets operate in an orderly manner include the temporary suspension of short selling to mitigate further risks and uncertainties that will affect the stability of the equity market.
At the same time, shorter trading hours would not have changed the pattern of higher activity towards the final period of trading, as the larger volume is due to orders received from Europe as the European markets open, as well as the opening of the US markets.
“It is not likely the pattern will change if trading hours are shortened unless the trading hours are reduced substantially,” says Bursa.
Bursa assures that it will continue to monitor developments of the Covid-19 pandemic, assess its impact and introduce additional measures as necessary to protect the well-being of the public and ensure the market continues to operate in a “fair, orderly and transparent manner.” — April 7, 2020
