The Nairobi Securities Exchange (NSE) and the Central Depository and Settlement Corporation (CDSC) platforms suffered a breakdown in their link when the markets opened on Wednesday.
While normal trading resumed past noon, the system cut off slowed down activity at the bourse.
Figures indicate that market turnover declined to KSh 336Million from Tuesdays KSh.640.5Million. The number of shares traded stood at 9 Million shares against 18.6 Million shares traded on Tuesday.
When the bourse opened on Wednesday, several stockbrokerage firms indicated that they could not communicate with CDSC after sending the trade file the previous day.
CDSC was reportedly having difficulties generating the holding file that is usually sent back to stock brokerage firms when the market opens.
The depository unit had to mine data from its Disaster Recovery Site after its system crashed.
“We are not the owners of the system and cannot therefore give u specifics on what went wrong,” said a source at the Capital Markets Authority (CMA).
While corporate accounts were not affected, it is the retail investors who were worst hit by this system failure at the NSE. Trading was delayed and only resumed normalcy minutes past 1 pm.
This is the first time this year that the newly installed trading system at the NSE is experiencing hiccups.
When the ATS went live in October last year, stockbrokers complained that the trade file from NSE was arriving late at their back offices. This was due to delays by CDSC to transmit the settlement file-used to debit or credit CD accounts after a transaction is complete.
Reports indicated then that some stockbrokers were receiving the settlement file as late as 9.30 pm, hours after trading has closed.
It appears that this problem is getting worse with the file arriving at the back office way after markets open.
An apparent lack of preparedness by the Central Depository and Settlement Corporation (CDSC) to handle the new infrastructure and the issues brought about by the decoupling of CDSC and the NSE, meaning the two platforms function completely independent of each other, stand out in the mess NSE finds itself.
