Time and the constitution of markets

Internal dynamics and external relations of stock exchanges in Fiji, Ghana and Iceland

Bibliographic Data

ID2159554
AuthorsErik W Larson (0000-0002-9998-688X), Erik Larson (0000-0002-6565-8087, corresponding author)
Year2010
Volume39
Issue4
Pages460-487
Publication date2010-11-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueEconomy and Society (JOURNAL)
Journal identifiersISSN: 0308-5147 • E-ISSN: 1469-5766
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/03085147.2010.510680
OpenAlexW1968401904
LanguageEN
Citations received2
References cited48

The organization of time influences the structural possibilities for social action as well as the cultural resources actors draw upon in social settings. In this paper, I use concepts developed in historical sociology to identify distinct elements of temporality to understand how time constitutes markets. I analyse how two types of temporal structures influence market behaviour and operation using comparative ethnographic data on stock exchanges in Fiji, Ghana and Iceland. Internal dynamics of markets organize time in manners that influence the nature of market competition and, consequently, the types of skills necessary to demonstrate competence. External relations position markets in relation to other social settings, connecting temporal orders between particular markets and these other settings as well as situating markets as the sites of the creation of legitimate information. Keywords: financial marketstemporalitypacingsequencingboundariesmarket structure and culture Notes 1 During my research, the exchange traded on Monday, Tuesday and Thursday. The exchange has since expanded to five-day-a-week trading In July 2010, the SPSE switched to an electronic trading system. 2 During the period of my research, settlement happened five days later. 3 The GSE now trades five days per week. 4 Subsequent to my research, the ISE has joined the OMX Nordic Exchange. 5 This paragraph provides an abbreviated summary of the institutional history of these exchanges which is developed further elsewhere (Larson, Citation2004b). 6 In a few instances, brokers attempted to physically prevent another broker from placing an order on the board, although this seemed to be an expressive act rather than an actual restraint on competition, since the stamped order slip guaranteed the trade. The physical action on the trading floor, however, did not follow the gender patterns that one finds in Western markets (Levin, Citation2001; Zaloom, 2006). 7 The broker's behaviour in this case may have technically violated one of the rules of the SPSE and Fiji's Capital Markets Development Authority (the government regulatory body) which calls for brokers to list orders in the order that they are received. On the other hand, brokers also have an obligation to receive best execution for their clients and the broker achieving the $3.00 price for his client to sell is certainly better than the other prices that the client would have received. 8 In this particular case, the first broker did not place the buying order, but called for a second round of trading. The broker again offered the large parcel of shares, but at a lower price which the second broker was not willing to match. She then bid for the shares at the higher price, executing the trade at the higher price (as the call-over trading rules established). 9 Since brokers would know the total number of shares offered for sale at or below the buying price, they did not risk having to buy additional shares (unless brokers or the exchange called for another round of trading). The exchange could, however, ask to see evidence that the broker actually had orders to buy that many shares. Since most brokers had some degree of proprietary trading authority, they typically had sufficient basis to claim that they had the authority to place the order. 10 The exceptions are the very rare instances that a client happens to be attending the call market and there are new orders coming to the market in which the client expresses interest. To my knowledge, this happened on one day of trading prior to the research period. 11 There are a few reasons for this pattern. First, the tenor of the markets differed during my research. The SPSE was experiencing a high-demand, low-supply period for most issues, while the GSE was experiencing the opposite for all but a few shares. Thus, a broker in Ghana who received an order to buy usually had plenty of orders to match already. Second, the minimum commission rates for the GSE are so low that brokerages cannot cover material costs (paper, printing) for these small trades, so it made little sense to expend effort to produce these trades. 12 Although much of this information became public due to newspaper articles (many of which quote staff members and directors of the bank and staff of the ISE), I do not disclose the names of the bank or listed company due to the fact that I was engaged in research at institutions that were involved with the events discussed during the time that the ISE handled the case. 13 Subsequent to my research, Ashanti merged with the South African company Anglo Gold to form Anglo Gold Ashanti. 14 At the time of my research, one widely followed Iceland company, DECODE Genetics, had its shares listed on the NASDAQ; its shares, however, did not trade on the Icelandic exchange. Subsequent to my research, some Icelandic companies listed shares on additional exchanges, particularly those companies that purchased subsidiary companies in other countries

Economics · Economy · Ethnography · Sociology · Stock exchange · Temporality · Culture, Economy, and Development Studies · Financial Markets and Investment Strategies · Historical Economic and Social Studies · Finance

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