Germans' late hours deals blow to City

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The Independent Online

London's position as Europe's biggest and most important stock market came under renewed threat yesterday after the German Stock Exchange announced it will stay open until 8pm.

London's position as Europe's biggest and most important stock market came under renewed threat yesterday after the German Stock Exchange announced it will stay open until 8pm.

The new opening hours, starting in June, mean Frankfurt will be staying open for business until New York closes, putting London at a clear disadvantage when competing for the world's investment money.

Less than a week ago, the Exchange was caused severe embarrassment when itscomputer-controlled dealing system collapsed in the middle of a global stock market sell-off. At present, London closes for share trading at 4.30pm, although after an agreement between the main European exchanges last year trading was started at 8am so dealing could start at the same time in London as the rest of Europe where clocks are an hour ahead.

After last Wednesday's fiasco, the London market allowed trading to stay open until 8pm for one day only. This was because the crash came on the last day of the tax year and would have stranded many investors who had to get their affairs in order before the end of the tax year.

But London Stock Market officials said there are no plans to follow the German stock market and extend opening hours further into the evening, despite the threat that investors may move business to Frankfurt to take advantage of the longer hours.

The German stock exchange is already about to leapfrog London and become the first major league stock market to be fully quoted on its own exchange. A panel headed by Werner Seifert, the chief executive officer of the German stock exchange, has concluded that while London still dominates the market place in financial services, Frankfurt is closing the gap.

Their report said although London has five times as much talent on the ground, in many of the high-growth sectors it is Frankfurt rather than London that is attracting the interest of the big global investors.

The domestic German stock market is growing as a new, less hidebound generation embraces share ownership.

A spate of takeovers and mergers is changing the face of German capitalism in much the same way that Thatcherism turned corporate Britain upside down in the 1980s. Dealers say the big international investors are increasingly focused on a handful of global blue-chip companies, which can be traded on more than one exchange regardless of where they are based.

The analysts say that the time change is just the latest step towards 24 hour trading. While London is dragging its feet, other European exchanges are following suit. Milan too has plans to move to 8pm, and Paris, Amsterdam, and Brussels last month announced they were merging and plan to stay open until 10pm local time.

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