Qatar Exchange (QE), which was recently upgraded to ‘emerging’ market by both MSCI and Standard and Poor’s-Dow Jones, yesterday cancelled all trades executed owing to some unspecified “technical” glitches.
The incident occurred during the trading session and consequentially required the stock exchange to cease trading until the incident could be resolved.
Trading then resumed until noon when the QE teams discovered that the technical issue had not been resolved, requiring a further halt to trading.
“All that we could gather from the exchange (as reason) was technical problems,” said one of the officials of a brokerage house. The bourse officials could not be reached despite repeated reminders and calls.
After consultation with Qatar Financial Market Authority, it was agreed to cancel all transactions that took place yesterday and any orders that had not been executed, a statement from the bourse said.
“This was decided because the incident had affected the flow of information and the brokers’ ability to execute their clients’ orders in a sound and correct manner,” the statement said.
Stressing that the incident did not affect the shareholder registers and the technical staff in the stock market are working to fix the fault; QE said it expects to resume trading as usual from today.
Investors had traded 7.37mn shares in the Qatar market’s 20-stock main index when trading halted, according to exchange data. On Monday, a normal trading day, the entire market traded a total of 19.7mn shares worth a total of 641mn riyals ($176mn).
The index on Monday set its highest closing level for five years, up 24% year-to-date.
The exchange’s chief executive Rashid bin Ali al-Mansoori told Reuters last month that among other steps, Qatar Exchange had submitted proposals to the government for higher limits on foreign ownership of stocks, which could encourage more firms to make initial public offers of their shares.
The market received a boost in June when international equity index compiler MSCI decided to upgrade Qatar and the UAE to “emerging market” from “frontier market” status. Inflows of foreign funds are expected to increase next May when the upgrade takes effect.
As part of a drive to internationalise Qatar’s market, NYSE Euronext bought a 20% stake in Qatar Exchange for $200mn in 2009. Last month Qatar Holding, the investment arm of the country’s sovereign wealth fund, bought out NYSE Euronext and ownership of the exchange is now entirely local.