Trading session left unfinished as NZX halts market

New Zealand shares were trending lower this afternoon when the stock exchange operator halted trading due to a problem with its network connection.

Thursday, August 5th 2021, 6:25PM

by BusinessDesk

In an email sent at 4pm, the NZX said it had identified participants had been disconnected at 3:30pm and consequently halted trading.

The stock exchange operator later said it was unable to establish stable connectivity before the closing auction at 4:45pm and decided not to reopen the market.

“Participants remain disconnected. The market remains in the current status. NZX has determined not to re-open the cash markets today. This includes not running a closing auction,” the NZX said in an email.

The S&P/NZX 50 Index was down 42.96 points, or 0.3%, at 12,754.33 when trading was halted. Turnover was only $90 million without the usual high volumes trading in the close auction.

After 5pm, the stock market operator said it had validated stable connectivity and participants could reconnect, but trading would remain halted.

The derivatives markets would be re-opened, however, with the close taking place at 10pm.

NZX has been in constant communication with market participants to ensure they are aware of the situation and to minimise the impact on their operations, an NZX spokesperson said.

“We have been very appreciative of their support and understanding as we work through resolving this technical issue.”

Grant Davies, an investment adviser at Hamilton Hindin Greene, said the market had been following a negative lead from the United States but everything was on light volume due to the halt.

Without a closing auction, stock prices aren’t finalised, but the majority of stocks had been trading lower.

Telecommunications firm Spark was leading the market lower, last trading down 1.7% at $4.75. Mainfreight was up 1.6% at $85.35 –– which would be a new record if it were to close at that price.

The Financial Markets Authority has previously scolded the NZX for not meeting its obligations as the licensed market operator, with substandard tech resources and poor risk management.

Criticism from the regulator came after the stock exchange was hamstrung by both a cyber attack and high trading volumes last year.

In January, the FMA said these types of outages were causing market participants to lose trust in the exchange.

The NZX has formed a permanent technology subcommittee to advise the board on technology investment, cybersecurity, and other IT policies.

Currency markets were unaffected by the outage, and the New Zealand dollar held onto gains made yesterday off the back of strong local employment data.

The kiwi dollar was trading 70.47 US cents at 3pm in Wellington, down from 70.58 cents yesterday.

The trade-weighted index was at 74.66 from 74.69 yesterday. The kiwi traded at 95.43 Australian cents from 95.31, traded at 77.28 yen from 76.93 yen, 59.54 euro cents from 59.46 cents, 50.74 British pence from 50.69 pence, and 4.5550 Chinese yuan from 4.5611 yuan.

Tags: Market Close