The problem, which according to stock brokers “is showing signs of becoming chronic” has not only affected share trading at Nepse but has started creating problems for investors as they cannot analyze the market trend due to dissemination of unauthentic information.[break]
On Monday, the problem on Nepse´s server that handles order information was detected at around 12 noon. Because of this some brokers were able to log in to Nepse´s portal, while others couldn´t, Anjan Poudel, president of Stock Broker´s Association, told Republica.
“We then informed the market operator about this but they couldn´t immediately trace what caused the glitch,” he said. In the meantime, more brokers started encountering the same problem, which created pressure on the market operator to do something immediately. Then at 1:07 pm it initiated a volatility halt and suspended trading for half an hour, on condition the lost time would be compensated by extending the trading hour till 3:30 pm, half an hour beyond the market closing time.
Stock brokers, who sell or buy shares on behalf of investors, cannot work properly whenever Nepse server malfunctions as this is the only way they can place orders for stocks they want to purchase or offload. And when all of them cannot process their orders simultaneously, no one can understand the demand and supply situation on the market.
“Imagine what would happen if brokers who were only planning to sell shares gain access to the system throughout trading hours. This can cause a market on an upward trend to lose steam,” Poudel said. “In the same way, a market that is taking a dip may suddenly rise, if connections are established with only those who were planning to purchase shares.”
Nepse has said it understands the gravity of the problem. “But the biggest problem is we have not been able to diagnose the trouble that has hit our server,” a Nepse official told Republica on condition of anonymity.
On May 8, when similar problem was detected and trading was suspended for almost two hours, it blamed the erratic electricity supply and installed another power back-up unit. “However, reoccurrence of the glitch on Monday proves, power supply wasn´t the source of problem,” the source said. “We are now checking the hardware and software installed on the server.”
So far, Nepse has conducted a thorough check of viruses, spyware and other malware on its system to check whether they were consuming memory and exerting pressure on the server. “We´ll continue to conduct more tests until we identify the problem,” the source said.
Stock brokers have taken Nepse´s response positively and have acknowledged technical problems take some time to be fixed.
“But till that time we want Nepse to halt trading immediately if such problems crop up,” Poudel said. “Otherwise investors will be on the losing end.”
Nepse fall continues
Nepse slide continued for the fourth consecutive trading day on Monday with the benchmark index falling 4.46 percent to 373.18 points.
The index also tripped the circuit breaker after it fell by four percent at 1:58 pm, which halted trading for half an hour. Share market experts attributed the fall to fragile political condition and fall in profits of most of the banks and financial institutions. “The glitch on the server of Nepse that stopped trading for half an hour also contributed to the fall,” they said.
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