Singapore Exchange Ltd said Friday trading would begin at the usual time, 9am, as the company tries to recover from the disruption that saw its market close early.
Southeast Asia’s biggest bourse was forced to halt stock trading at 11.38am (10.38am Thailand time) on Thursday because of a technical malfunction, and it failed to follow through on two pledges to reopen. SGX said trading would resume on Friday in a statement that also included an apology from Chief Executive Officer Loh Boon Chye.
Loh, who took over as CEO exactly a year before, replaced Magnus Bocker just a few months after the Swede was forced into a public apology in the wake of two trading disruptions in the space of a month. Those mishaps led to a reprimand from the Monetary Authority of Singapore. The latest breakdown was at least the second malfunction at the exchange operator in the past year, after a near two-hour disruption in derivatives trading in August.
“It’s not a great start for the CEO,” said Alan Richardson, a Hong Kong-based fund manager at Samsung Asset Management, which holds SGX shares. “These kinds of glitches shouldn’t be happening with such frequency in an international financial center.”
SGX twice notified brokers on Thursday that it was planning to reopen, once targeting 2pm and then 4pm, but on both occasions failed to restart trading.
The exchange detected a technology issue early Thursday that affected its trade confirmation process and moved to a secondary system, it said. But duplicate and missing trade confirmation messages were seen in that system.
“We sincerely apologise for the market disruption. Our recovery time has to be better and we must minimize downtime for market participants,” Loh said in the Friday statement.
MAS said Thursday that it was closely monitoring the situation. The malfunction exceeded the regulator’s acceptable maximum unscheduled downtime for financial institutions of four hours in any 12-month period.
The exchange hosted at least three calls during the afternoon, one of which involved raised voices from some participants, according to two people who asked not to be named because the talks were private. About five minutes before the scheduled 4 pm start, brokers demanded SGX cancel the reopen because they were worried about a disorderly market, said the people. One of the issues was that different parties were seeing different data.
Covering trades
Some market participants were left confused and unhappy by the day’s events. One atrader at a Singapore-based firm said they had positions they couldn’t exit because of the abrupt close. The trader, who asked not to be named so as not to jeopardise relationships with SGX, said they were having problems with their orders as early as 10am. Neither the exchange nor counterparties could confirm their orders were filled, the trader said.
“For people with short positions, they’ll need to cover their trades within the day and that’ll cause problems,” said Ernest Lim, a trader at CIMB Securities Singapore Pte. “Some clients’ trades haven’t been executed and their status still shows the orders are pending.”
Shares of the bourse operator have lost 5.2% since Loh took the helm, versus a 12% drop in the benchmark Straits Times Index. The stock gauge fell 0.1% on Thursday.
Singapore Exchange is home to Southeast Asia’s largest stock market, with total capitalisation in the city of $494 billion, according to data compiled by Bloomberg. About S$1.6 billion ($1.2 billion) of shares changed hands on an average day in the past 12 months. The exchange maintains a monopoly on stock trading in Singapore.