Direct share trading by mobile phone gets trial

By MICHAEL FOREMAN

The stock exchange yesterday successfully tested a wireless share transaction system by trading from a mobile phone.

In the first trial of its kind in the Asia Pacific region, several trades were made in a fictitious stock using wireless application protocol (WAP) - a technology that promises to allow mobile phones, pagers and handheld computers to access the internet.

The stock exchange is piloting a WAP securities trading application developed by computer manufacturer Hewlett-Packard, mobile software specialist Tantau Software and trading technology company Computershare. The system is capable of displaying share prices and exchange news announcements and of accepting trading orders from a WAP-enabled cellphone or personal digital assistant.

Stock exchange managing director Bill Foster said mobile phone trading would be offered on a commercial basis to brokers from mid-year. They would decide when and how to offer it to their clients.

Mr Foster said it also would be up to brokers to decide how much to charge for the service.

"Obviously there will be a premium at first due to the technology involved, but competition will eventually ensure it is delivered at the lowest possible price."

While wireless trading will allow investors to trade stocks directly without reference to their share brokers, all investors must be registered with a Common Shareholder Number, which will be obtainable from brokers.

Mr Foster said the system as installed could handle 10 times the entire current volume of trading of around 3500 transactions a day and could be expanded.

He hoped that brokers would be able to widen their client bases with a new breed of wireless investors.

"There is a growing generation of people who are very comfortable with using these devices and anything that widens access to the markets is good for those markets," he said.

But John White, chief executive of broking firm DF Mainland, which already offers internet-based trading, was sceptical.

"I don't think there's going to be a huge rush," he said.

"It's an interesting gimmick but not a panacea for sound investment decisions."

Mr White pointed out that many brokers already used paging services, which gave prices, but prices alone were not sufficient information.

Peter Hansen at Access Brokerage said he was very interested in the wireless system but he wanted to reserve judgment until he had received full details from the stock exchange.

While the exchange is one of the first capital markets in the world to install a WAP trading system, investors will have to wait until WAP-capable digital cell phone services and compatible phones must become available.

Ericsson's WAP-enabled R320s as used in the exchange demonstration are not yet on sale here.

Telecom's $200 million digital cellular technology network is scheduled for commercial launch next year.