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System troubles haunt Japan's Jasdaq market

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CIOL Bureau
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TOKYO: A computer glitch halted trading at Japan's Jasdaq Securities Exchange for three hours on Monday, the third time this year that system trouble has marred trade at the country's biggest market for start-up companies.

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The exchange, home to over 900 firms such as Internet mall operator Rakuten Inc. and cable TV operator Jupiter Telecommunications Co. Ltd., resumed trading at 12:30 p.m., after disabling some 30 billion yen ($272.8 million) worth of trades in the morning session.

A computer programme bug, following a partial amendment to its systems, caused the trouble, the exchange said.

It had halted trading in April and in February after unusually high trading volumes on certain stocks caused system troubles. The Jasdaq, previously an over-the-counter market, also had a similar problem in November 2003.

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The systems trouble drew criticism from market participants as well as the government.

"It surely hurts Jasdaq's credibility as a stock exchange," Yoshihiko Kosuga, deputy general manager at Mizuho Investors Securities Co, said.

"They (Jasdaq) should be glad that they are unlisted the problem would have been huge if it was a publicly traded company."

Shuichi Hida, portfolio manager at Plaza Asset Management, said: "You can buy and sell when you want, that's a market economy. People invest on such an assumption. It's a problem if that doesn't work."

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Top financial regulator Hirofumi Gomi on Monday ordered the exchange to submit detailed reports on the trouble by the end of next month.

The exchange's transaction volume has been rising sharply recently, with daily turnover hovering at some 70-100 billion yen, due to growing volume in online trading as well as the rising popularity of new issues.

The Jasdaq market last upgraded its computer system in July following the incidents in April and February and boosted the number of orders that can be made. It plans to raise the limit again by next January.

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The total value of all Jasdaq-listed stocks -- at about 14 trillion yen ($127.3 billion) -- is still less than 5 percent of that of the Tokyo Stock Exchange, Asia's biggest bourse.

Japan's second-biggest bourse, the Osaka Securities Exchange, has stopped accepting applications for listing on its Hercules market for start-ups since May after a surge in trading volume swamped its computer systems.

The freeze came as individual investors' step up trading in initial public offering stocks in a bid to grab quick returns.

The exchange, which plans to introduce new computer systems with faster data-processing capability early next year, will not start accepting new listing requests until November.

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