Wednesday, December 03, 2008

Another day, another "ATS" hitch @ the NSE

It'd be to easy for the cynic in me to say “plus ca change, plus ce la meme chose”. Or new CEO, same old NSE bs. In any case, I've confidentially been informed that the ATS has a trigger mechanism that refuses any share orders that lead to the NSE falling below 3,100 (joke).
As an investor, you need to be aware of this important buying point. Yes there was a power cut, but this is a Ksh0.8trn business so there is no excuse. It should have a business continuity plan that among other contingencies, takes into account what happens when there is a black-out, terrorist attack, floods etc. It may never happen, but it can happen and if value your business you need to plan for those once-yr/decade events.

The other broader issue, is that it seems that ATS never underwent a robust user testing. Because its a processing system, you'd expect it to have been tested for huge volumes (such as Safaricom which led to a break), low volumes, certain NSE levels, certain price inputs (this would void the almost monthly price "funnies").

Unusually, the hitch didn't result in a hike in the NSE so maybe the previous coding that breaks the ATS at NSE levels below 3,100 has now been fixed.

PS: Like I said here, the NSE is very straight forward business. Its a a bit like our tourism, be supportive of it and peeps see the potential and attractions. Mess it around and all over sudden it becomes a curiosity rather than Kenyans' calling point for their investments and savings.


Ssembonge said...

3,100 level triggers the 'circuit breakers' to minimize damage. Lol.

Even though I've not been following the shenanigans at the NSE, a successful retest of the lows is healthy for the bourse.

Are you loading up or sitting on the sidelines?

MainaT said...

I am lurking with intent.

I do so wish they would just let the NSE find its bottom though.

Maishinski said...

What we need at NSE is:

1. A strong, progressive, oversight authority with no vested interests.

2. Mandatory public disclosures of all Insider trades

3. Jail terms for misaapropriation and abuse of Stockbroker-client relationship.

4. Stiff fines and Jail terms for unfair/manipulative practices.

5. Public database people with more than one Nominee Account.

6. Public disclosure of all Nominee accounts held by companies/institutions + any trades they engage in.

6. Demutualization.

NSE is currently like a stone house built on clay soil with no foundation (when it rains?). I honestly wish it was the other way round: a Mud-hut built on Granite.

Maishinski said...

5. Public database of people with more than one Nominee Account.

coldtusker said...

red on green... bad idea!!!

MainaT said...

Maishinski-Not to pre-judge, but Mwangi's CEO appointment was a missed opportunity in the reforming arena. An overarching financial regulator is something even Ndung'u of CBK thinks is a good idea. It'll come soooner rather than later.

Is orange ok CT?