System fault disrupts trading activities on JSX
JAKARTA (JP): Trading activities on the Jakarta Stock Exchange (JSX) were suspended for more than one hour during the afternoon session yesterday due to a fault in the trading system.
Share prices declined 1.18 percent in thin trading.
Stock transactions were suspended at 2:05 p.m., or five minutes after the second session began, because the automated trading system failed to allow brokers to modify their bids.
"We could put in our buy and sell orders but could not modify any deals," a stock trader said.
The trading system is known as the Jakarta Automated Trading System (JATS).
"The fault was not in the application program but in the hardware network system," JSX director Mas Achmad Daniri told traders when announcing the lift of the suspension.
The JATS system, which has been in operation since May 22 last year, is controlled by two trading engines that operate simultaneously, one of which functions as a back-up engine.
"But today, the two engines failed to operate," Daniri said.
"The two engines are meant to record the same stock transaction data but they failed to do so today," an informed trader told The Jakarta Post.
The JATS application system allows brokers to modify their orders and withdraw their bids before any deals are done.
"It's just too risky to trade in such conditions," the chairman of the Jakarta Brokers Club, Nurkhamid Akhmad, told the Post. "It became worse because in the first five minutes of the second session dealers had already put in a lot of orders.
"We have been informed about what happened, but don't know why the two engines failed," Nurkhamid added.
Operational guidelines issued by the JSX management stipulate that in the event of a JATS malfunction, trading can be continued manually.
However, the JSX management could not operate the manual system because trading boards and other facilities were not available on the trading floor.
"It would have been the first time that we had gone back to the old manual system," a trader with a local brokerage said.
He added that brokers would have been unwilling to trade through the manual system because their bids had been placed in the computerized system before the suspension.
Daniri said that the suspension was lifted when the back-up engine began to operate properly.
Weak sentiment
Stock prices on the JSX dropped 6.44 points to 537.51 points, bringing total losses to 10.20 points, or 1.8 percent for the first two days of the week.
Losers outnumbered gainers 71 to 12, while 48 stocks were unchanged yesterday.
"The sentiment was so weak because foreign investors were mostly sidelined. I think they are disappointed with reports of the first-half-year earnings of most big companies," a dealer with PT Asian Development Securities told the Post.
"Moreover, they are also upset with the political situation in the country. They keep selling when stocks prices have already declined significantly."
Several dealers contacted by the Post also confirmed that the price drops were not attributable to the system fault.
"I'm not sure if the market would have lost more than six points had there not been a suspension. It was obvious to me that there were a lot of selling orders from foreign investors before the suspension," one of dealers said.
The dealer from Asian Development Securities said that most of foreign brokerages, including HG Asia, WI Carr, Jardine Fleming and ING Baring, were net sellers yesterday.
Data from the JSX show that most of blue chips were among the losing stocks.
Telkom fell Rp 50 (21 U.S. cents) to Rp 3,200 while Indosat was unchanged at Rp 7,150.
Cigarette maker HM Sampoerna declined Rp 900 to close at Rp 22,500 while Gudang Garam dropped Rp 50 to Rp 8,675.
Other losing stocks were Bimantara (which declined Rp 125 to Rp 2,025), Semen Gresik (down Rp 175 to Rp 5,475) and Bank Internasional Indonesia (down Rp 100 to Rp 5,500). (alo)