Changing times at the NYSE

Speaking at the World Economic Conference in Davos, New York Stock Exchange Chief Executive Officer John Thain confirmed that the NYSE is considering opening 2 hours earlier (at 7:30) in an attempt to capture more European business. (also CNN where Thain states this is not anything new.)

It will be interesting to watch the response of those who work at the NYSE who will most likely be asked to work two more hours.

From the Financial Times:

"...the first big test of earlier trading will be whether Mr Thain can win support for the idea among traders, specialists and NYSE member companies. He says a decision is likely within a year. How soon that decision comes - if indeed it does - will be an important indicator of how seriously London and other European exchanges should take the NYSE offensive."

NPR also has an interesting angle on this is by briefly examining what it will mean elsewhere. For instance, currently many finance professionals around the globe (and especially in the US) tailor their work day around the NYSE open even when they themselves are in different time zones. Will this mean more early mornings? UGH.

Interestingly (and less widely reported), Thalen also discussed plans to increase the value of the NYSE whose seats have fallen sharply in value due at least in part from growing competition. One strategy? A public stock offering.

From the Arizona Republic:

"A public offering would give Thain the currency needed to buy another market, according to exchange members. Thain and Securities and Exchange Commission Chairman William Donaldson, himself a former NYSE chairman, have said they expect consolidation among U.S. exchanges"

Showing why there is a great temptation to do so, the same Arizona Republic article points out the success of the Chicago Mercantile Exchange since they have gone public:

"The Chicago Mercantile Exchange, the largest U.S. futures market, sold shares in December 2002 for $35. They rose $12.80, to $209.90 in NYSE trading Thursday, giving it a market capitalization of almost $7.2 billion. The value of the NYSE's combined memberships is $1.6 billion"

The success of the Chicago market is partially behind the plans for the NYSE to trade more types of securities.

From Reuters.

"Thain said the United States would remain the focus of the exchange's expansion for the coming year as it examines ways to expand its product line to include trading in options, futures, derivatives, convertible bonds and fixed income products, putting it head-to-head with Chicago's derivatives exchanges."