Glitch cuts NZX 'pain' to five hours

The Stock Exchange opened for trading two hours late yesterday and exchange operator NZX blaming problems at Telecom, its service provider.

Telecom said the problem was caused by the failure of a hard disk in a computer that protects NZX's network connection from hackers. The market eventually opened at midday.

Although NZX apologised for any inconvenience, brokers appeared grateful rather than angry for the delay.

"Given trading conditions, the market was going to provide seven hours of pain today so instead we are only going to have to put up with five," said Paul Nicholson, an institutional broker at UBS Warburg.

Happening on a Monday morning when the Australian market was closed for a public holiday, the outage hit at as good a time as any, he said.

Another broker said that although it was "a bit of a pain" having to inform clients that trading was suspended, shorter trading days were better because trading volumes were compressed.

Telecom spokesman John Goulter said the problem would not have stopped brokers from trading but it did bring down the market announcements platform.

"So, clearly, the exchange felt with that platform not operational, they couldn't trade," he said.

Spokeswoman Rowan Macrae said it was difficult to quantify any cost to NZX.

The company would have a "rigorous" debrief with Telecom.

Neither Macrae nor Goulter would comment on whether Telecom would pay any compensation to NZX.

Macrae said it was a serious issue for NZX when the company had made significant investment in technology during the past 18 months to ensure stability.

Goulter said Telecom would investigate what had happened and implement any changes necessary to prevent a repeat.

It was the first trading halt on the exchange since more than an hour was lost on January 28, also because of a telecoms failure.

Goulter said the two problems were unrelated.

Technical issues also stopped trade at least eight times during 2003 and last year. NZX blamed telecoms links to share registries, Computershare and BK Registries for six of the outages.

Last year, NZX said it would establish a central clearing house that would take a snapshot of every listed company's share register each morning as a means of overcoming external telecoms problems.

But these plans were abandoned in December and NZX instead teamed with Australia's ASX Perpetual, launching its own share registry business and buying BK Registries.