Mishap Forces Singapore Exchange (SGX) to Close on July 14, 2016

CreditMaster July 15, 2016

Mishap Forces Singapore Exchange (SGX) to Close on July 14, 2016

In a financial hub that has become one of the most important in the world, traders and investors alike would not expect any mishap to hit the systems. However, for the 4th time in two years, The Singapore Exchange has suffered yet another malfunction causing a market outage. This time, SGX, home to Southeast Asia’s biggest stock market, was forced to suspend trading at around eleven on Thursday, July 14, 2016.

The latest problem occurred when duplicate trade confirmation texts were sent, leading to stopping in trading of major stocks such as DBS and Singapore Airlines. The technical malfunction was supposed to be handled quickly with the bourse saying trading would resume at 2.00 p.m. local time but this was not to be. The reopening was pushed to 4.00 p.m. only for the bourse to announce complete shutdown until Friday.

The first announcement of the temporary suspension of trading gave traders hope but with the double failure to restart, the situation became reminiscent of the 2015 debacle when the bourse was forced to halt trading two times in a month under the leadership of Magnus Bocker.  This comes as the bourse‘s chief executive officer (CEO) marks his first anniversary at the job. Loh Boon Chye, who replaced the Swede Bocker, was supposed to instill confidence in SGX, but the latest setback is set to upset the market.

The latest trade halt precipitated a quick reaction from top traders including Andrew Sullivan of Haitong International Securities Group who expressed the disappointment with the management’s failure to get the system running. The trader was emphatic that such malfunction will hurt the credibility and reputation of SGX in the global financial markets.

The reaction by The Monetary Authority of Singapore (MAS) is also being watched closely after its reprimand of the 2014 trading disruptions at the bourse under Magnus Bocker. With some investors set to suffer losses if prices change during the interruption, pressure is growing on Loh Boon Chye, a former executive at Bank of America in charge of Asia-Pacific global markets.

The disruptions are seen as a big blotch on the home of Southeast Asia’s largest stock market and traders are categorical about a long-lasting solution to the issue. The lack of communication and poor handling of the issue have also been condemned by traders.

As Loh Boon Chye, the bourse CEO, celebrates one year on the job, these are challenges he is expected to handle efficiently owing to his extensive experience in the industry. There are high expectations that the latest setback will help SGX come up with a solid solution to the disruption.


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