Bad day at the office
Stock traders are notoriously jittery people, especially in these troubled times. So the last thing they need when they're trying to get their heads around implications of the Dubai government trying to defer some of the debt of its holding company - Dubai World - is for the share trading system to deliver a BSOD.
But that's effectively what happened today, precipitating a 3.18 percent, 170 point fall in the FTSE 100 - the biggest since the dark days of last March. Client connectivity issues at the London Stock Exchange meant it had to suspend trading at around 10:30 this morning, not to resume until 14:00.
Traders must have been apoplectic, as the market was plunging at the time on the news that the government of Dubai said it had asked to postpone the repayment of $3.5 bn (out of a total of $59 bn) of debt owed by its investment vehicle - Dubai World. This is the outfit responsible for some of the most opulent development s in Dubai, like Jumeira Palm Island.
Understandably, this has led to renewed fears about the level of exposure to debt by banks and drove banking and insurance shares down. Indeed, confidence in any company involved in that region is bound to suffer.
The FTSE 100 had already fallen by 100 points before the gremlins took over, and picked up where it left off after. Xavier Rolet, CEO of the London Stock Exchange, said: "We regret the inconvenience that today's disruption to trading has caused for our clients. Having resolved the immediate issue, we are working hard to ensure this doesn't happen again ahead of switching to MillenniumIT's trading platform next year."
