An additional 30 minutes of trading at the Tokyo Stock Exchange may pit some investors against algorithm-driven funds seeking to capitalize on price-sensitive announcements to be made during extended hours.
The close for Asia’s second-biggest equities market will be extended to 3:30 p.m. from Tuesday. Of 800 companies that will post earnings after this date, more than 40% plan to report during the extended period, according to a survey by the exchange. That compares with less than 20% of total quarterly releases made during market hours last season.
This enhanced trading period is raising concerns among fundamental-based hedge funds and long-only investors who fear the shift will give rise to machine-driven price moves that don’t necessarily reflect the fair value of a company.
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