SGX trading system breaks down for second time in a month

Glitch occurs in first hour of trading, affecting firms that use Sesops terminals


FOR the second time in only a month, stock trading on the Singapore Exchange's (SGX's) creaky computer system was paralysed by a glitch yesterday.

Some angry traders say it is time the exchange looked at speeding up the introduction of its replacement computer system.

Yesterday's hiccup, which occurred in the first hour of trading, turned out to be just as stressful for affected traders as the events of Feb 28, the day of the big market meltdown.

Back then, the breakdown in the SGX computer system caused mayhem during the final hour of trading due to a massive logjam of orders as investors reacted to a global selldown of shares.

Yesterday's trouble began at 8.45am - 15 minutes before the market opened. By 10am, one hour after the opening bell, normal trading had been restored to all of SGX's Sesops terminals - but not before many traders experienced major frustration.

Affected brokerages included DBS Vickers, UOB Kay Hian, Kim Eng Securities, Fraser Securities and DMG & Partners Securities - all of which use SGX's 17-year old Sesops terminals.

Firms such as OCBC Securities which have their own trading systems hooked up to the SGX trading engine, matching 'buy' and 'sell' orders, were unaffected by the glitch.

The latest technical strife to hit Sesops sparked a fresh flood of complaints from dealers and remisiers from affected brokerages. They expressed anger over the business they might have lost to rivals whose systems were still up and running during the stoppage.

In a statement after the market closed yesterday, SGX said it 'regretted this morning's incident' arising from the 'access difficulties on many of the Sesops terminals from 8.45am to 10am'.

'We have currently isolated the cause of the trading incident to one group of Sesops trading terminals,' it said. SGX has rectified the problem and will continue to monitor the computer system closely, it added.

Still, despite the glitch, the turnover of shares yesterday soared to 2.05 billion shares worth $1.91 billion from last Friday's sluggish 1.33 billion shares worth $1.28 billion.

This, however, failed to pacify some of the dealers.

A DBS Vickers dealer noted: 'The first hour of trading makes up 90 per cent of many brokers' business. They can't tell their clients to come back one hour later because their systems are down.'

One Fraser remisier said: 'As we were keying in the orders, the screen suddenly went blank. Those who came in before 8.45am couldn't unwind their pre-open orders, while those who came late could only sit and stare at their blank screens.'

The Internet broking services provided by affected brokerages were also hit.

Said trader Peter Ong: 'I found that I couldn't make any adjustment to the orders which I had keyed in the night before. The glitch left me at the mercy of traders whose systems were still functioning.'

One market observer also raised the issue of whether SGX should step up the pace in upgrading to a new system. It had said earlier that the upgrade would take 18 to 24 months.

'The fact that two glitches occurred within a month suggests that Sesops may be showing its age in handling orders,' said another market observer.

Last year, SGX had to dump SGXTrade, with which it had originally planned to replace Sesops, as it was riddled with glitches.

It said yesterday it 'remains committed to a long-term technology programme to upgrade its trading infrastructure and introduce new trading functions'.

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'The first hour of trading makes up 90 per cent of many brokers' business. They can't tell their clients to come back one hour later because their systems are down.'
A DBS VICKERS DEALER, on the one-hour hiccup yesterday