Investors count losses as NSE system failure halts trade
NSE trading floor. Investors and stockbrokers were left counting losses October 29, 2013 after a technical hitch with the NSE’s trading system made it impossible to buy or sell shares. Photo/FILE
What you need to know:
The Nairobi Securities Exchange (NSE) delayed opening of trading on Tuesday morning after a hitch in the trading system.
The NSE and the Central Depository and Settlement Corporation (CDSC) issued a joint statement as well assuring stakeholders that the problem would be resolved overnight.
The loss of a whole day’s trading is likely to depress the market numbers for this week, which on Monday opened on a low note with equity turnover halving to Sh304 million compared to Sh744 million on Friday.
Investors and stockbrokers were left counting losses Tuesday after a technical hitch with the NSE’s trading system made it impossible to buy or sell shares.
The Nairobi Securities Exchange (NSE) delayed opening of trading on Tuesday morning after a hitch in the trading system.
The exchange issued a statement in the evening confirming the loss of a whole day’s trading to the hitch, which is the second one in the market this month.
“We regret to inform you that it has not been possible to trade today as a result of technical issues experienced. We apologise for the inconveniences caused by this outage and we wish to assure you that all the relevant teams are working hand in hand to ensure resumption of market operations tomorrow (Wednesday),” said NSE market and product placement manager Donald Ouma.
The NSE and the Central Depository and Settlement Corporation (CDSC) issued a joint statement as well assuring stakeholders that the problem would be resolved overnight.
“We shall keep all our stakeholders appraised on any new developments,” the statement read.
Stockbrokers in particular lose whenever there is limited or no trading, given that they derive their income from the commissions charged on trades.
“Continued technical issues with the trading system have seen no trades take place today,” said Genghis Capital on their Twitter account.
The NSE Automated Trading System (ATS) connects remotely to stockbroker offices, allowing them to trade from their premises.
The ATS system came live in September 2006, replacing the open outcry system that had been in place since the establishment of the bourse.
In 2007, the NSE extended trading to brokers offices through the wide area network, that ended the need for a centralised trading floor at the exchange premises.
On October 1, the market lost three-and-a-half trading hours following a technical problem with the automated trading system, which was attributed to the network. Equity turnover fell sharply as a result of the reduced trading hours, to Sh112 million from Sh569 million recorded the previous day.
The loss of a whole day’s trading is likely to depress the market numbers for this week, which on Monday opened on a low note with equity turnover halving to Sh304 million compared to Sh744 million on Friday.
Major stocks
Resumption of trading is likely to see heightened trading activity on the back of pent-up demand.
In the first trading session following the October 1 interruption, the bourse saw equity turnover hit Sh1.28 billion, compared to Sh112 million on the shortened trading day.
This session on October 2 also saw the market hit a capitalisation high of Sh1.8 trillion for the first time, with major stocks gaining substantially.
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