TRADING at Dhaka Stock Exchange (DSE) was suspended for almost four hours on Sunday and put on halt for two hours more on Monday because of technical failures in main server. The country watchdog on bourse — Bangladesh Securities and Exchange Commission (BSEC) has reportedly demanded explanation on the unusual flop to make sure whether it is merely a technical failure or it smacks something else. News reports show that trading resumed at the bourse only ten minutes before the regular closing time on Sunday but continued until 4:00pm. On Monday it opened two hours late giving time to repair the machine and continued up to 4.15 pm in an attempt to compensate the loss in trading hours. But this break down in normal trading came as a big shock to traders who were overpowered by apprehensions of intervention by vested interest groups as trading is steadily picking up in the bourse after three months lull. It not only caused trading losses but also put wrong signals with eroding confidence in the system.
Share transactions usually take place between 10:30am and 2:30pm on every working day. Further inquiry revealed that the bourse’s main engine failed to process trading information uploaded by TREC (trading right entitlement certificate) to start the trading. The trading was closed until the recovery of the malfunctioning as IT professionals worked with assistance from experts of NASDAQ OMX – the supplier of the technology and solved the errors by afternoon.
The DSE installed the trading software and its server at a cost of over Tk 35 crore as a state of the art automated trading system in December last year to ensure smooth transactions on the floor. But after the system’s failure only six months through its installation, stockbrokers expressed surprise in the back of DSE management’s claim that it has set up a flawless system and there is no fear of trade disruption through mechanical failure. Meanwhile, stocks finished almost flat on Sunday as reduced trade hours impacted the overall participation. Then on Monday, it suffered another setback in trading hours although DSE index rose to over 4,600 point from below 4,000 during the City Corporation elections.
Questions have arisen whether the DSE has installed the rightly designed trading machine or there were compromise on quality in buying the system. If a system collapses after six months, it is not a system to be relied upon and the BSEC must investigate into the matter to remove fears from investors’ mind. Question arises if the NYSE can have years of proper functioning with only a few problems despite the increasing use of high frequency algorithm based software, it is surely not too much to expect that the DSE have adequate safeguards to run the system with total safeguards.
