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New upgrade to halt system hitches at Nairobi Securities Exchange

FINANCIAL STANDARD
By BY JAMES ANYANZWA | November 11th 2013

BY JAMES ANYANZWA

KENYA: Plans are underway to upgrade the automated trading systems at the Nairobi Securities Exchange (NSE) and the Central Depository and Settlement Corporation (CDSC).

This comes amid frequent failures of the automated trading system that have grounded operations at the 59-year-old exchange.

The Capital Markets Authority (CMA) said the process to revamp both the Central Depository System (CDS) and Automated Trading System (ATS) is on track.

Late last month, trading failed to kick off for a day due to a technical hitch in the ATS.

 Analysts estimated the value of uncompleted transactions that day to be around Sh500 million and Sh1 billion for equities and bonds, respectively.

Early in the same month, the ATS also encountered a serious network error that halted trading for three-and-a-half hours.

 The ATS, which has broken down several times in the past, was implemented by Millennium Information Technologies (MIT) of Sri Lanka at a cost of Sh70 million in 2006. 

It replaced the replaced the open outcry system.

Meanwhile, the latest statistics from the CMA show that the securities exchange  experienced a dramatic run in activities in the three months to September this year, helped by growing foreign inflows.

Equity turnover for the third quarter grew 96 per cent to Sh42.1 billion, from Sh21.5 billion over a similar period last year.

CMA Acting Chief Executive Paul Muthaura said the growth momentum is likely to be maintained, with most companies expected to announce relatively good full-year earnings in the coming months based on the half-year results that have been reported.

“Participation in Kenya’s capital markets will pay off in the long term,” he said.

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