For traders in Singapore, the days of the leisurely lunch break are over.
On Monday, SGX, the Singapore exchange, did away with the traditional lunchtime halt to trading, moving to “all-day” trading.
All day trading is hardly a novel concept in the western hemisphere, where exchanges have operated continuously throughout the day for decades.
While the City of London’s venerated “long lunch” only started to die off recently, the London Stock Exchange has not paused for lunch since at least the second world war.
But not pausing is a recent phenomenon in Asia, where market structures such as exchanges are sometimes less mature businesses.
SGX’s move still leaves the lunch break intact at exchanges in at least six countries in Asia, including Indonesia, Malaysia, Thailand, China, Hong Kong and, perhaps surprisingly, Japan, where there is time for a snooze after lunch given a generous two-hour halt.
Steve Edge, who runs Asiaetrading.com, a useful website that tracks market structure developments across the region, says that lunch breaks have retained their popularity in Asia because a lot of retail brokers value the opportunity lunchtime gives to “wine and dine” clients. And in many Asian markets, there is a strong culture of getting to know your clients over a meal.
His website has produced a handy “cheat sheet” showing trading hours at the main Asian exchanges, including their lunch breaks.
So strong is this culture in Hong Kong that a recent attempt by the Hong Kong exchange to shorten its two-hour lunchtime market halt met resistance from retail brokers, Mr Edge says.
But the desire to keep broker-client relations warm over lunch is now being trumped by the hard-nosed commercial realities: exchanges in Asia are starting to feel the chill wind of competition from alternative trading platforms, including “dark pools”. They also need to attract flows from outside Asian time zones – just as exchanges in Europe and the US have been extending their hours to capture flows from Asia. It is all about generating the “network effect” of attracting more flow, which itself begets more activity.
Only last week, Hong Kong Exchanges & Clearing – setting out a strategic plan for growth – conceded that it now faced competition from local “dark pools”.
HKEx has also started to tackle the lunch break. Once as long as two hours, it was recently shortened to 90 minutes. By March next year, the plan is to bring it down to an hour.
SGX said it had abolished the lunch break to allow investors “to respond more easily to regional market movements and news flows as Singapore’s securities market hours now overlap more with those of other Asian exchanges, including those in China, India and Japan”.
The same rationale has driven the HKEx to align the opening time of its market to that of mainland Chinese markets. It plans to align the opening of the afternoon session in March next year. And it has put out for public consultation a plan to extend opening hours of its futures market to capture more business from European time zones.
But, unlike Singapore, Hong Kong still believes in the sanctity of lunch and there are no plans to abolish the break completely. The restaurant business will breathe a sigh of relief.
Get alerts on Emerging market investing when a new story is published