NZX outages a major concern — Gaynor
"These guys need to up their game. I'd expect regular market outages from the Mongolian or Moroccan stock markets"Featured comment
UPDATED 4:50PM: Today's three hour trading halt is not a sign the stock market operator's system is overloaded after the first half of this year has seen more new listings than all of 2013, NZX chief executive Tim Bennett says.
All trading was halted half an hour into the morning session and was initially flagged to resume at 10:45 am after a "restart to the message gateway", however on the restart connection to participants was lost, and eventually trading was moved to the secondary market environment, which took another hour, Bennett told BusinessDesk. This is the stock market operator's second trading halt, and its third technical glitch, this month. It was unclear what had caused today's loss of connection, and work over the weekend would establish whether the issues were interconnected, Bennett said.
The trading halt comes in a week when Serko and Gentrack joined the bourse, while Hirepool, which had been set to list next month, withdrew its initial public offer. So far this year the NZX has had 16 new listings, including seven on the stock exchange and nine on the debt market, compared to 13 news listings last year, 10 of which were stock listings, and 12 in 2012, of which six were stock listings. Bennett said the market has the capability to handle the bigger load, and were not the cause behind the outages.
"Our largest trading days were last year, so it is certainly not to do with system being overloaded," Bennett said. "It's been a terrific week with two IPOs, and this is disappointing."
Other upcoming listings include Scales Corp and IkeGPS, with more rumoured to be in the pipeline.
DeutscheCraigs,chief executive Brett Shepherd, whose firm has managed several of the recent IPOs, said he didn't think the NZX's technical issues would deter companies from listing, or offshore institutions from investing in the local market.
Of the 38.5 million shares traded on the NZX 50 Index, more than 20 million were traded in the first ten minutes of the resumed session. The benchmark was recently at 5138.775. Forsyth Barr broker David Price said the outage was noticed by foreign investors who queried the lack of trading.
"There have been a few issues, we had a long period of no issues and then we've had a few in a short space of time," Price said.
Brian Gaynor, executive director at Milford Asset Management, told BusinessDesk the regularity of these outages was the major concern.
"It happens around the world, you get these things, but it is happening too often with the NZX and I think it dents confidence in the way the organisation is run. It shouldn't have these kind of problems," he said. "They really need to scrutinise and investigate what's wrong, and what they can do to improve it."
Shares in NZX fell 0.7 to $1.34 and have gained 8.9 percent this year.