Traders see red

Robert Laing

Robert Laing

The JSE's computer glitch yesterday cost stockbrokers millions in lost transaction fees, and their clients possibly billions.

Yesterday's trading day was cut from the usual nine hours to under four by a hardware problem. The usual 9am opening time was delayed until 3:10pm, and the stock exchange remained open for an extra two hours until 7pm to recoup some of the morning's lost trade.

David Shapiro, market watcher at Sasfin, said while stockbrokers may be able to make up yesterday's lost trading in coming days, the loss to futures traders unable to buy and sell shares to meet their contracts is immeasurable.

"The day started with no power at home. Then I got to work and found the JSE's system down. It's been one lousy Monday," Shapiro said.

A derivatives trader who asked not to be named said: "Never mind the stockbrokers - just think what it has cost their clients. International markets were up four percent thanks to the US government bailing out mortgage financiers Fannie Mae and Freddie Mac. We were all poised to enjoy that lift, and we couldn't."

Russell Loubser, the JSE's chief executive, said at 5pm yesterday that trades had reached R3billion, so the chances of making up most of the day's trade by 7pm were looking good. The JSE has averaged nearly R9billion a day this month. "We know we inconvenienced the market, and we are extremely apologetic about it," Loubser said.

A problem with the network was picked up at 6:30 yesterday morning. "This was not due to the LSE trading software system which has worked 100percent for the past six years, but the network which has been 99,6percent reliable so far."

Yesterday's network crash came a fortnight after the JSE cut its fees by 7,5percent, saying it could afford to do this because of its growing trading volumes.

Traders yesterday griped that the JSE should have rather spent its surplus cash making its network more robust.

Loubser said: "There are a lot of components in our network, and a lot of parties involved in managing it. I can't say exactly what the problem was now, but a full investigation is under way to ensure this does not happen again."