'Black mark' for Australia exchange as glitch halts trading for the day

Australia’s stock exchange suspended trading for the rest of the day after earlier saying the problem that caused a 90-minute delay to Monday’s open had been resolved, drawing criticism from investors and brokerages.

ASX said i there will be no closing price auction on Monday that normally takes place at the end of the trading day. The bourse operator said it will advise the process for determining closing prices, remaining session states and status of orders.

The issue comes at an inconvenient time for investors and traders assessing their positions, with policy meetings scheduled at the Bank of Japan and the Federal Reserve this week, and Australia’s central bank set to release minutes from its most recent meeting on Tuesday. Australia’s equity market is worth us$1.1 trillion, making it the sixth-largest in the Asia-Pacific region.

“I’ve never seen anything quite like this before,” said Niv Dagan, the Melbourne-based executive director at Peak Asset Management. “It’s frustrating because they said they’d fixed it. We’d hope the ASX sorts things out by tomorrow to allow traders to exit positions before the Fed meeting. You’ve got traders and fund managers looking to change their portfolios before that, and unfortunately, they can’t do that.”

ASX delayed the normal 10am local time equity market opening until 11:30am due to an issue relating to a component that allows it to manage individual stocks, said Matthew Gibbs, a spokesman for ASX in Sydney, adding that the company was working with its technology vendor Nasdaq to prevent a recurrence. It then halted trading in the afternoon before cancelling it for the rest of the day.

Chi-X Australia, which operates a competing stock-trading system, had to delay its usual open due to the ASX glitch, said its chief executive John Fildes.

The ASX’s shares fell as much as 2.4 per cent in Sydney trading before trading was halted, while the nation’s benchmark equity gauge, the S&P/ASX 200 Index, was little changed. ASX shares were up 14 per cent this year prior to Monday, compared with a 19 per cent increase in a Bloomberg Intelligence gauge of security and commodity exchanges.

“We were expecting it to be fairly quiet in the market on Monday and tomorrow,” said James Woods, an analyst at Rivkin Securities in Sydney. “There would’ve been some position adjusting last week and on Monday and tomorrow” ahead of the Fed and BOJ meetings, he said. “It’s a bit of a black mark for the reputation.”


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