February 16, 2011
By Staff Reporter
By Andrew Bushe
DUBLIN — The Irish Stock Exchange — languishing in the doldrums this year while the economy booms — plans to finally have a completely electronic dealing facility installed by the end of next year and to do away with the antiquated blackboard and chalk system being used at the moment.
Tom Healy, ISEQ chief executive, revealed the planned change after the publication of a report by consultant Peter Bacon who had been commissioned by the exchange to analyse the problems.
Bacon warned that unless there was change the Irish exchange was going to be “a very lonely and cold place.”
“I have made the point that it is a paradox that the fastest growing European economy, not only this year but for the past seven years, has the worst performing stock exchange,” he said. “People don’t know and can’t access the market effectively and that is the nub of the problem.”
He said it was “extraordinary” that the exchange had not embraced new technology and electronic trading in the past.
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Bacon’s said that since four of the biggest Irish companies, AIB, BofI, CRH and Eircom, were included in the SETS electronic trading system in the London Stock Exchange a significant shift of business had taken place to the UK.
To boost Dublin’s dismal performance, Bacon’s recommended e-trading, harmonization of the rules with other exchanges and the adoption of the same closed and trading days.
He also calls for abolition or reduction of the 1 percent stamp duty on share dealing to give a boost to business.
At the launch of Bacon’s report, Finance Minister Charlie McCreevy said he was keeping the question of stamp duty under review though he said it was not in his “immediate focus”.
In America, Japan and a lot of European exchanges there is no charge and stamp duty in the UK is 0.5 percent. The cost of abolishing it would be in the region of _180 million a year.
Healy said the exchange must become a fully participating part of the emerging alliance of European stock exchanges and blue chips that will become effective next year.
“We plan to be there with them when that starts,” he said.
Healy said that the exchange would also have to find a way to attract more of the new breed of sophisticated Irish high-tech companies. At the moment, most are choosing to float on the NASDAQ in New York.