Trading slumps as Bucharest Stock Exchange introduces fee for online market data

The value of trading on the Bucharest Stock Exchange (BSE) fell to nearly one third of the average for February on the first day information about market trends and trading orders ceased to be offered free of charge and in real time over the Internet.

Trading yesterday amounted to 5.5 million euros, compared with the daily average in February of 13 million euros.

“There were far fewer trading orders today and therefore fewer transactions, with clients mostly calling us to inquire about market trends,” says Grigore Chis, trading manager for SSIF Broker, the largest independent securities firm.

The BSE decided only to provide information on market trends to those who pay a 50 dollar (38 euro) monthly subscription fee starting March 1. Investors can still access market information, but it comes with a 30-minute delay.

“The decline of liquidity was indeed concurrent with the lack of free information, and this certainly influenced liquidity, though it is hard to quantify, as the traded value fell to less than half of the previous day,” says Alin Brendea, head of operations with Prime Transaction.

There was only one time in the last month when the traded value was lower than yesterday, and that happened when the stock exchange’s trading system went offline nearly one hour after the opening of the market and trading was not resumed. The traded value was higher even in those three days when the companies in the second tier of the market were halted from trading in order to be transferred to the Arena trading system.

The lack of free information in real time mostly affected speculators who try to make money from daily price fluctuations. “Our clients are not speculators, I have noticed no influence of the lack of real time quotes on the BSE website,” said Adrian Manaila, Elda Invest manager.

The general manager of the Bucharest Stock Exchange does not believe the lack of free online information influenced the liquidity of the market, though he says several investors did complain they could not receive information about the market yesterday.

“This project was announced in advance, and the information is there, although delayed. I don’t think introducing paid viewing influenced liquidity on the market. The 50 dollar amount is not that high for an investor speculating intra-day. We did receive a few e-mails from investors complaining they could no longer access market information,” said Stere Farmache, BSE’s manager. According to Farmache, the BSE has already signed contacts with several investors to provide information in real time.

“We must move to another phase because none of the major stock markets in the world provides online stock quotes for free. Although viewing charges seems like an extra trading cost, these costs will go down as we intend to maintain our policy of reducing trading costs,” the BSE general manager added.

The issue of investors viewing information in real time could be addressed once brokers start providing information about market trends over the Internet in real time. vlad.nicolaescu@zf.ro