Power failure stops stock trading

LAGOS-No trades were made at the Nigerian Stock Exchange (NSE) on Monday, the first trading day of the week, due to technical glitches. Trading at the Exchange normally starts at 10:30am and finishes at 2pm.

At midday, when trading had not begun, an official of the NSE that spoke off the record to NEXT attributed the problem to the “upgrading of the Exchange’s server.” At 4 pm, some stockbrokers who were still hopeful that trading might commence, were seen waiting and talking amongst themselves on the trading floor.

But by 5 pm, still no trading had been recorded at the exchange. At 5:30 pm Monday, Sola Oni, the Assistant General Manager of the NSE’s Corporate Affairs Department, said that “what happened has nothing to do with the Exchange’s infrastructure.”

A different explanation

In contrast with the earlier view of the situation being caused by problems with the Exchange’s server, Mr. Oni explained that the cause of the delay resulted from a power supply problem. “There was a problem with the power supply which affected the Automated Trading System’s (ATS) power chalet,” he said.

Mr. Oni said that there would be no implication if the Exchange does not trade for a day. “There is nothing extraordinary if we do not trade today because nothing will be lost apart from stockbrokers (fees) who could not buy or sell stocks,” he added.

He failed to explain that the NSE also lost out on the commission (around 2.5percent) they would have charged for total transactions for a day. However, a financial analyst said, “No trading at the NSE for one day is not as big a deal as no trading at the New York Stock Exchange for a day.”

He added, “Things happen. Maybe today, what happened had a one in a million chance of happening. A lot depends on how the whole thing is handled. If the officials at the Exchange come out in the open and explain what happened, fine. What will not be good is if there is a cover-up and they deny if there are genuine problems.”

The Exchange which started operations in 1961 using call-over, a manual trading system, switched to Automated Trading System (ATS) on April 27, 1999. Mr. Oni said that, for the Exchange, returning back to call-over trading system is not an option as efforts are being made to fix the problem.

It’s happened before

On Tuesday, January 27, the Nigeria Stock Exchange was put on hold for four hours after the Automated Trading System experienced a technical problem. Trading occurred for only 30 minutes on that day. Binos Yaroe, the Head of the Marketing and Quotation Department of the NSE, had said that the problem was not really technical, but was due to an upgrading of the ATS programme.

At the time, some brokers complained that the upgrading of the ATS programme during trading hours was not a good decision by the NSE.

Global stock trading

Meanwhile, on the global view Monday, about 12 stock exchanges around the world recorded losses. The Europe DJ Stoxx Index shed 1.05%, the Australian Securities Exchange ASX100 lost 1.12%, the France SBF 80 Index lost 0.96%, and the Hong Kong’s Hang Seng Index shed 1.23%.

Also, the Germany TECDAX shed 1.06%, the Netherland AEX Index decreased by 1.60%, the UK FTSE All shares Index was also down by 0.95%, while the Japanese Nikkei 225 Index lost 1.38%.