Stock exchange goes on-line; brokers say time for 5-day trading

The first quarter of 2004 is expected to witness the local stock exchange (Trinidad and Tobago Stock Exchange)  moving from the manual method of trading to a computerised system. Such a move would see TT following in the footsteps of Jamaica and Barbados. While transactions are recorded through the TT Central Depository, actual trading is done on a board and recorded manually. An archaic system by any standard. According to local stockbrokers, this may pave the way for five day trading. The TTSE now trades three days a week.

Subhas Ramkhelawan, managing director of Bourse Securities Limited, said the system of electronic trading would simplify the clearing and settlement process and on the back of the present security depository, provide the level of efficiency that is necessary to move to trading over an increased number of days. “I think that with a five-day trading week there will essentially be price discovery every day as well as an ongoing supply and demand situation,” he said. He explained that with the present manual system of trading, shares are called once in alphabetical order and then called again for anyone wishing to trade. A computerised electronic system, however, would bring an end to this and allowing persons to place their orders at anytime once the house is open.

“I think the key aspect that the investor would be interested in, is that you now have greater efficiency. You now have a queue-in system which ensures that you are in queue for trading and this is going to provide greater transparency since all the orders are up there in real time,” he said. Another local stock broker noted that this move to computers would result in greater market access for local companies and reduce the number of gaps in the present trading system. Robert Meyers at  Caribbean Money Market Brokers (CMMB), said  that the move to automated trading would take TT’s system of trading out of the “stone age.” Another broker said it would make the operations of the stock exchange more transparent. It would also put stock brokers on equal footing. “It’s going to be first in, first out,” said one stock broker, who spoke on condition of anonymity, noting that clients with small orders were going to be treated with the same measure of respect that big clients are. “Their stock purchases, although  small, cannot now be brushed aside,” it was noted.