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Has full-day trading really added to liquidity?

When the local stock market switched to full-day trading about two years ago, the hope was that liquidity would increase because of the additional 90 minutes of trading.

Although I don't have any official data, it doesn't look like this has happened - if anything, it looks to me that volume has dwindled instead.

Of course, all global markets have been affected by a drop in daily turnover brought on by Fed tapering and interest rate worries, but the fall here is much more marked than elsewhere.

Speak to retail brokers and many believe that ironically, removing the lunch break that used to stretch from 12.30-2pm has actually reduced their productivity and had an adverse impact on turnover.

For instance, the head of a broking house told me that if you study the pattern of daily trading, you'd notice that volume drops off from 11.30am onwards as remisiers dash off to grab a quick lunch.

So is it time to bring back the lunch break? I think so.

First, it's absurd to expect anyone to work continuously without time off for lunch - as many critics of full-day trading have noted, how would SGX's management like it if they had to work non-stop throughout the day?

Second, some remisiers have told me that they used to use the break to sometimes meet and service customers, something which they now cannot do. And if customers don't get the service they demand, some would probably have stopped trading, which partly explains why volume has worsened here compared to elsewhere.

Perhaps a compromise is possible. Since the exchange's aim was to add 90 minutes' worth of trading every day, then what if the market was to open at 8.30am instead of 9am, but close between 1-2pm for lunch?

That way even though nett addition to daily trading isn't 90mins but instead 60mins, at least brokers get an hour to have lunch. I'm pretty sure that all brokers would not mind coming in half an hour earlier every day if this meant they could enjoy an hour's lunch time.

Note also that if SGX was to agree to this, it would go a long way towards establishing goodwill with the broking community which views the exchange as high-handed and insensitive to their needs. Since brokers are really the SGX's frontline staff who sell the exchange's products to the investing public, surely it makes sense to at least try and accomodate their needs?