Category: Archive

End of an era

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — Over two centuries of Irish business history finally gave way to computer technology last weekend as the Irish Stock Exchange abandoned the richly paneled trading room in its Temple Bar headquarters in central Dublin and switched to an electronic link up with the German Deutsche Borse.

The era ended when the Exchange’s Siobhan Lynch wiped the last chalked up prices off the giant blackboard of the trading room floor of the Anglesea Street HQ when the final session closed on Friday afternoon.

The Exchange’s CEO Tom Healy was happy to see the old-fashioned dealing room with its handful of traders pass into history.

Only about 2 percent of the country’s shares were still traded on the traditional dealing floor, where two half-hour sessions were held in the morning and afternoon. The vast majority of business was done on office screens or via the telephone.

Founded in 1793, the Exchange moved to their current HQ in the 1870s but its antiquated impression didn’t fit with the image of the Celtic Tiger economic boom.

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"It exuded Victoriana to a degree that made us uncomfortable," he said. "There won’t be a physical location for the Exchange any more. We will probably sell the building and move to an office. Our future role will be to make sure there are facilities for trading and to regulate the market."

On Tuesday, the Exchange went live in a link with Xetra, the German electronic trading system, which allowed investors to see the orders and bids and volume of trades.

In the heyday of the Exchange, all Irish stocks and securities were dealt on the Anglesea Street floor, but since the 1980s the business had steadily ebbed away, not just from the trading room, but also from the Irish Exchange.

About half of the shares in the four biggest companies, Eircom, CRH, Bank of Ireland and Allied Irish Banks, are now bought and sold though London.

Healy hopes the changeover will boost the Irish market. "There has been an absolute explosion in interest by private Irish clients, much more marked than in the UK," he said.

A recent study by the Goodbody Stockbroking firm found the number of investors in Ireland have soared to 507,000 — about 17 percent of all adults — compared with only 390,000 a year ago. But the Irish market has been in the doldrums.

"Ireland was the second-poorest-performing market in Europe after Belgium and one of the worst in the world last year," said Davy stockbrokers’ head of research, Robbie Kelleher.

"It underperformed by a huge amount. The index barely changed whereas the average European index would have been up by about 35 percent.

"So far this year the European average would be up about 4 percent but the Irish index is more or less unchanged."

Kelleher said the dealing floor had become an irrelevance and the change would bring Ireland into the modern world. "Most of our dealers wouldn’t have even known where the Exchange was, never mind been on the trading floor," he said.

Angus McDonnell, a partner with Bloxham Stockbrokers and a former President of the Exchange, said the dealing room had seen all the big Irish business booms from canals and railways through to bicycles and mining and the start of the dot.coms revolution.

"In the past a lot of brokers were very rich in their own right and ran their businesses with a much more autocratic style," McDonnell said. "There were terrific characters and there was great camaraderie among them. At one stage a lot of them wore bowler hats."

McDonnell said that with 24-hour international dealing. the challenge now is for brokers to keep the Irish market in Ireland. "They are the natural promoters of Irish companies because they are close to them and know what is going on," he said.

One of the 10 regular dealers on the floor, Jack Riordan, 48, who has traded there for Goodbodys for 16 years, said he was sad to see it end but would not miss the twice daily trip in from his office in the increasingly gridlocked city traffic.

"I was the oldest by far," Riordan said. "I will miss meeting the people, but the time had come for it to close. It couldn’t have continued. It must have been the only trading floor in the developed world that still used a blackboard.

"We all got on very well and there hasn’t been a proper row for years and years. My life is going to become more boring but it should be a lot more productive and efficient."

Riordan said the new system should attract in more business. "The fear among Europeans and Americans was that Paddy was going to leg them over because what went on was all so invisible," he said. "Now it will be much more transparent with everything out in the open."

To mark the closure and celebrate the new hig- tech beginning, the staff plans a party for June 16.

"They are waiting for 10 days or so to see that it all works," Riordan said.

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