HK Hit with Aftershocks

The HK market took a big hit as the US market dropped 360 last night. After falling over 1,000 points, the market clawed its way back to close down 3%. Not a bad result considering. However, the exchange's processing capacity is more worrying.

Yesterday, all brokers reported a massive slowdown in the exchange's computer system when entering orders for Alibaba's trading debut. Some orders were left in limbo for up to 10 minutes waiting on the exchange's system to process them.

Unfortunately, during this period, we were unable to amend or cancel the orders. All we had was a message that the order was under processing. When the order was finally processed, the price may have moved beyond the specified range resulting in the order being rejected after sitting in the processing queue. Then it had to be re-entered again.

The entire issue can be avoided by increasing the size of the order queue. This is especially important after the trading spreads were narrowed and shares often trading beyond the 24 spread range. the resulting re-input and processing of orders increased the demand on processing cycles and increased line traffic. Technically, the exchange's order processing system did not slow down. By limiting the order procesing queue, the workload was pushed back into the communications network and the participants' own systems. The result is that market depth is reduced and orders have to be input many times before they can be executed. From the exchange's standpoint, increasing the capacity will mean more trades execution and bigger profits. Let's get this fixed as soon as possible.

Market Indices
Australia All Ordinaries 6568.50 - 2.37%
Bombay Sensex* 19058.93 - 1.20%
Hong Kong Hang Seng 28760.22 - 3.19%
Japan Nikkei 15771.57 - 2.02%
Shanghai Composite 5330.02 - 4.85%
Singapore STI** 3673.01 - 0.27%
South Korea Composite 1979.56 - 3.11%
Taiwan Weighted 8937.58 - 3.90%

*Late trading
**Closed for holiday