Australian Stock Exchange operator ASX Group stopped market trading last week due to technical problems, leaving brokers and CFD traders furious during a period of extreme market turbulence.
Just moments after the stock market opened on Thursday, the exchange sent out a notification and stated that all trades that were executed before the stoppage were being reviewed. New overnight news originating from Europe about a Greek debt deal witnessed markets rallying strongly, but CFD traders in Australia were unable to react as the exchange struggled to deal with its IT issues.
As well as the European development, some large local companies like National Australia Bank Ltd., Woolworths Ltd. and AMP Ltd released a trading update. The cumulative market capitalization of the 10 Australian companies with major announcements in the morning made up more than 10% of the value of the Australian stock market.
‘It’s hugely frustrating on a trading day when you have macro headlines out of Europe and a host of corporate reports to deal with,’ said IG Markets institutional dealer Chris Weston. ‘It shows why we need an alternative to the ASX.’
Trading resumed at 4pm after a 4 hours shutdown but the incident was something of an embarrassment for the Australian Stock Exchange; coming just days ahead of the launch of trading in Australia by rival bourse operator Chi-X on Monday. The launch will see the break of a two-decade monopoly held by the ASX. The serious issue was the lack of opportunity for CFD traders and investors to either mitigate their market risk or increase exposure, in particular during this volatile period in Europe.
‘Chi-X must be rubbing their hands with glee,’ said one observer. For the Australian stock exchange ‘it must be awful in terms of the timing ahead of the arrival’ of a new rival.
This is not the first time that the Australian Stock Exchange has experienced problems, with the last outage having taken place last February in a episode that forced the Australian exchange to suspend operations early.