Brokers braced for another day of likely trouble
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A day-long “technical problem” plagued the Indonesian Stock Exchange (IDX) on Monday, causing the typical daily trading volume of Rp 3 trillion (US$315 million) per day to shrink by a two-thirds, brokers and stock analysts pointed out.
Officials at the IDX circulated a memo in the morning before trading began to inform securities that the “remote trading system of securities” was hit by “technical problems”.
The memo also noted that error had forced the exchange to cancel the fifteen minute pre-trading session that normally starts at 9:10 a.m., and to delay the start of the trading session by almost 30 minutes to 10 a.m.
Ito Warsito, IDX president director, said that due to the problem, only 84 out of the 118 listed securities companies could connect to the bourse’s trading system.
“We are investigating why the remaining 34 securities members were unable to connect to the system,” he said. He added that the exchange, in collaboration with vendors of the hardware and software utilized in the system, would conduct the investigation.
“The investigation will involve a meticulous check of every part of the system to figure out all possible causes of the interconnection failure,” he told The Jakarta Post.
Ito added that due to the amount of system prodding required, the exchange could not determine the length of time needed to conclude the investigation.
Muhammad Alfatih, an analyst from PT Samuel Sekuritas, said that traders sat on their hands due to the problem.
Satrio Utomo, PT Universal Broker Indonesia research division head, said that traders lost the opportunity to net commissions from the trades that could have happened that day.
He pointed that the day saw roughly Rp 800 billion ($84 million) in transactions, a third of this month’s daily average of at least Rp 3 trillion.
Ito said that trading would proceed on Tuesday. “We will trade as usual tomorrow.”
However, Satrio said that traders were prepared to face complaints from investors if case the system suffered from difficulties for a second day.
According to Satrio, the problem caused data to trickle in slowly to traders. He also pointed out that “different traders would receive different data” due to the system collapse. “This was because the IDX had switched to the emergency system, given the main system was not running,” he said.
Satrio added that due to the problem, securities started trading only at 10 a.m. when the problem waned, but halted once more at 10:15 a.m. when connection “died out again”.
As a result, the composite index, which was at 4145.4 points at 10 a.m., nosedived by 4.39 points to 4141.01 points at 10:20 a.m. The index then plateaued until 1:15 p.m., when the system sputtered back to life.
The index peaked at 4150.4 at 1:20 p.m. but soon fell in a series of fluctuations, ending at 4145.87 at 4 p.m., although the technical difficulties had prompted the bourse to close the second trading session thirty minutes earlier than normal at 3:30 p.m.
Top losers of the day included PT Bumi Resources (BUMI), Asia’s largest coal exporter. Their stock price continued to tumble after they announced in their report on Sunday, a net loss of $334.1 million in the first half of 2012.
Their stock price closed at Rp 890 apiece, lower than the previous day’s closing price of Rp 940.
Siswa Rizali, a trader who helps manage approximately US$367 million at PT Andalan Artha Advisindo Sekuritas, said that the system difficulties have “created a reputation problem” for the IDX.
“It happened before,” he said, as quoted by Bloomberg.
The IDX system had suffered a glitch in 2009 as well, when a large security house flooded the trading system with orders.