MILAN (Reuters) -Deutsche Boerse will allow equity investors to trade on the Frankfurt Stock Exchange until the close of US stock markets from Monday, a move that highlights increased competition to entice clients.
The two-hour extension to 10 p.m. local time (2100 GMT) could lead to higher volumes for Deutsche Boerse, but also increase costs, while putting pressure on foreign competitors to possibly consider a decision. similar, traders said.
In Germany, investors can already trade until then or even later through platforms operated by local brokerage firms Tradegate and Lang & Schwarz, which are used by retail and professional investors.
“Deutsche Boerse offers a lot of foreign stocks on its trading platform and this move may be aimed at attracting more interest in retail,” said Anish Puaar, European market structure analyst at Rosenblatt Securities.
Even though retail stock ownership is much smaller in Europe than in the United States, where households hold more than a third of the market, the region experienced a trade boom last year among retail investors. who had more time to negotiate during the blockages.
The extension would affect stocks, exchange-traded funds (ETFs) and mutual funds, and was made possible by the new securities clearing platform introduced by German clearinghouse Eurex in September this year. , said the German stock exchange operator.
“By extending trading hours, investors can react to events in the US markets late at night, among other things, and profit from trading on the stock exchange,” he added.
The move is the latest development of exchanges to increase income by allowing punters to trade in markets in different time zones. While some exchanges like Moscow have already increased their trading hours to attract Asian clients, other exchanges like Tokyo are taking interim steps in this direction.
Pan-European stock operator Euronext said on Wednesday it had no plans to extend the trading day. Last year, he rejected a proposal to shorten trading hours that was aimed at improving liquidity and the well-being of traders.
Deutsche Boerse shares have underperformed the German market as a whole, with stocks rising just 2% so far this year, compared to a 15% increase in the index.
They also fell behind Euronext shares, although they did better than the London Stock Exchange.
(Reporting by Danilo Masoni in Milan, additional reporting by Saikat Chatterjee and Huw Jones in London and Stefanie Geiger in Frankfurt, editing by Keith Weir)
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