This archive report was first published on 9 January 2020.
On Wednesday, the Nairobi Securities Exchange (NSE) and the Central Depository and Settlement Corporation (CDSC) platforms experienced a breakdown in their link when the markets opened, causing a significant slowdown in activity at the bourse.
Although normal trading resumed past noon, the system cut off had a lasting impact on the market, with market turnover declining to KSh 336 million from KSh 640.5 million on Tuesday.
The number of shares traded also took a hit, standing at 9 million shares against 18.6 million shares traded on Tuesday.
According to reports, several stockbrokerage firms were unable to communicate with CDSC after sending the trade file the previous day, highlighting the extent of the system failure.
CDSC was reportedly experiencing difficulties generating the holding file that is usually sent back to stock brokerage firms when the market opens, forcing the depository unit to mine data from its Disaster Recovery Site.
When asked about the cause of the system failure, a source at the Capital Markets Authority (CMA) stated, 'We are not the owners of the system and cannot therefore give you specifics on what went wrong.'
While corporate accounts were not affected, retail investors were the worst hit by this system failure at the NSE, with trading delayed and only resuming normalcy minutes past 1 pm.
This is the first time this year that the newly installed trading system at the NSE has experienced hiccups, with the system going live in October last year.
