|
PureBytes Links
Trading Reference Links
|
I thought this might be of interest. Hope everyone is having a good weekend.
John
Saturday, November 13, 1999
Pits silenced as exchange in Sydney enters electronic era
REUTERS in Sydney
The last shout of traders at the Sydney Futures Exchange (SFE) was at the
bar when the trading pit closed yesterday, ending 39 years of open outcry
where dealers in colourful coats won and lost huge sums using hand
signals.
The mood on the floor was mixed in its final hours, with some traders
describing it as melancholic while others alluded to being in a fish bowl
as visitors caught a glimpse of a tradition before its extinction, to be
replaced by 24-hour screen trading.
"Everyone is a little bit sad to see it go," temporary local trader Jason
Letchford said. "We are all dinosaurs now and we're not really trained to
do anything else. We are almost unemployable to be really cynical about
it."
Robert Lerner, an outspoken trader who has been critical of proposals to
demutualise the SFE, said: "It's really kind of weird. It's very relaxed
here [yesterday]. There are visitors all over the place. Families have
come in, too."
However, the mood was positive when the pit finally closed, with the
exchange shouting A$25,000 (about HK$124,900) worth of drinks at the
Brooklyn Hotel, where trading yarns were swapped.
Most temporary local traders and local traders - there are four membership
classes at the SFE, with other two classes being floor members and
associate members - would continue to trade under the new electronic
system, Mr Letchford said.
Mr Lerner said they also wanted to "wait and see" how the SFE's Sycom IV
screen trading system operated because "it has not been fully tested in
full battle. But there is a lot of desire from people to trade on the
screen".
In the latest SFE publication, chief executive Les Hosking wrote: "The
changes that are occurring in the financial services sector . . . could
have the severest effect on exchanges, brokers and market makers, even
leading to possible extinction."
Next to the article, a picture caption stated: "Trading floors will become
extinct."
The main reason is cost. It is cheaper and quicker to trade on the screen
than in the pit, allowing round-the-clock trading and requiring fewer
support staff.
"Electronic trading is the equivalent of the industrial revolution for
financial markets," Mr Hosking said.
However, the future of the SFE - which began operating in 1960 as the
Sydney Greasy Wool Futures Exchange - is in doubt, with an
SFE-commissioned report on demutualisation under attack from several
membership classes even before its release.
Local members will start legal action on Monday in a bid to have SFE
management release documents on demutualisation.
"They affect our vital interests," a trader said, describing SFE
management as "secretive".
The issue, which has split the membership, is about the entitlements of
members under demutualisation.
The SFE board will meet on Tuesday to consider the SFE-commissioned report
by investment house Macquarie Bank on entitlements.
"It's going to be rejected," a trader said, referring to the SFE
constitution requiring each of the four membership classes to endorse a
demutualisation proposal.
The alternative?
"Get the Large Broker Group (LBG) to come to some conclusion and present
their ideas to us, so the four membership groups can discuss it around a
table," a trader said.
The LBG, representing nine investment banks or floor members, blocked a
$260 million cash and scrip offer for the SFE from share registry and
software group Computershare.
----------------------------------------------------------------
Published in the South China Morning Post. Copyright © 1999. All rights
reserved.
** Common Sense Is Not Common **
|