Frankfurt stock extends trading hours as competition intensifies

Deutsche Boerse stock will allow investors to trade on the Frankfurt Exchange until the close of US equity markets starting Monday, a move that highlights increased competition to win over customers. 

Extension of two hours till 10 pm. Traders said local time (2100 GMT) could bring in higher volumes for Deutsche Boerse but could also drive up costs, putting pressure on foreign rivals to consider a similar move. 

Investors in Germany already at that time or even later can trade through platforms run by local brokerages 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 the move may be aimed at attracting more retail trading interest,” said Anish Poor, European market structure analyst at Rosenblatt Securities. 

Even though retail equity ownership in Europe is lower than in the US, where homes account for more than a third of the market, the region saw a boom in business last year among retail investors who have little access to business during the lockdown. 

The German exchange operator said the expansion will affect equities, exchange-traded funds (ETFs) and mutual funds, and was made possible by a new securities clearing platform introduced by German clearing house Eurex in September this year. 

“By increasing trading hours, investors can, among other things, react to developments in US markets late in the evening and take advantage of on-exchange trading,” it added. 

The move is the latest development by exchanges to increase revenue by allowing punters to trade markets in different time zones. While some exchanges such as Moscow have already extended their trading hours to attract Asian clients, other exchanges such as Tokyo are taking tentative steps in that direction. 

Pan-European exchange operator Euronext said on Wednesday it had no plans to extend trading days. Last year it rejected a proposal to reduce trading hours, aimed at improving liquidity and traders’ well-being. 

Deutsche Boerse shares have outperformed the broader German market with just 2% of shares so far this year, while the index has gained 15%. They have also outperformed Euronext stocks, although they have outperformed the London Stock Exchange.