The Tokyo Stock Exchange faced calls for tighter controls yesterday after a botched trade saddled a securities firm with a loss of more than US$224 million and briefly wreaked havoc on Asia's biggest bourse.
Mizuho Securities said an error by one of its dealers meant it accidentally tried on Thursday to sell 600,000 shares in J-Com, more than 41 times the number of the Osaka-based telecom outsourcing firm's outstanding stock.
"We must take action to prevent another mistake. I want people to think of measures not to repeat the same kind of mistake," Japanese Prime Minister Junichiro Koizumi said yesterday.
Mizuho Securities president Makoto Fukuda told reporters that the blunder would cost the firm "at least" ¥27 billion (US$224 billion) and some reports suggested it could be substantially more.
The brokerage arm of Mizuho bank "put in sell orders for 610,000 shares at ¥1 instead of one share at ¥610,000," Fukuda told a midnight news conference on Thursday after a day of chaos.
For others in the market, the error was a chance to make a quick profit.
"Everyone in the market instantly knew the order was a mistake so some clever guys predicted that Mizuho Securities would have to put in a massive buy order later," said Hideo Mizutani, chief market analyst at Sieg Securities.
The turmoil is also yet another embarrassment for the Tokyo Stock Exchange, which last month was forced to suspend trading in all shares for the first time ever after its computer system crashed.
Although the latest problem was apparently the result of human error, many observers questioned whether the exchange's controls are adequate.
"I think the accident is a good opportunity to overhaul the rules in stock markets in Japan as this kind of mistake could happen again in the future. For example, it is worth considering rules on shares which show unusually big price fluctuations, or rules on a deal that obviously was made by mistake," Mizutani said.
Japanese media said the rising popularity of online trading exacerbated the losses for Mizuho as news of the blunder quickly spread over the Internet.
One investor wrote on a bulletin board: "Do all you can to buy J-Com! I'm having fun!" Another said: "I racked up ¥5 million in an instant but I feel as if I was doing something wrong."
J-Com saw its opening price of ¥672,000 fall within minutes of opening on Thursday to its limit low of ¥572,000, before rallying up to the limit close of ¥772,000, apparently as Mizuho tried to reverse its mistake.
Chaos ensued as the market tried to figure out what happened, bringing down shares in the brokerage sector. The benchmark NIKKEI-225 index tumbled 1.95 percent in Thursday's trade, largely on profit-taking after recent gains.
Shares of Mizuho Financial, whose group includes Mizuho Securities, tumbled ¥31,000 or 3.4 percent to ¥890,000 on Thursday.
But calm returned to the market yesterday, when the NIKKEI-225 gained 220.69 points or 1.45 percent to close at 15,404.05. The Tokyo Stock Exchange suspended trading in J-Com shares yesterday to prevent further chaos.
CREDIT-GRABBER: China said its coast guard rescued the crew of a fishing vessel that caught fire, who were actually rescued by a nearby Taiwanese boat and the CGA Maritime search and rescue operations do not have borders, and China should not use a shipwreck to infringe upon Taiwanese sovereignty, the Coast Guard Administration (CGA) said yesterday. The coast guard made the statement in response to the China Coast Guard (CCG) saying it saved a Taiwanese fishing boat. The Chuan Yu No. 6 (全漁6號), a fishing vessel registered in Keelung, on Thursday caught fire and sank in waters northeast of Diaoyutai Islands (釣魚台). The vessel left Keelung’s Badouzih Fishing Harbor (八斗子漁港) at 3:35pm on Sunday last week, with seven people on board — a 62-year-old Taiwanese captain surnamed Chang (張) and six
RISKY BUSINESS: The ‘incentives’ include initiatives that get suspended for no reason, creating uncertainty and resulting in considerable losses for Taiwanese, the MAC said China’s “incentives” failed to sway sentiment in Taiwan, as willingness to work in China hit a record low of 1.6 percent, a Ministry of Labor survey showed. The Directorate-General of Budget, Accounting and Statistics (DGBAS) also reported that the number of Taiwanese workers in China has nearly halved from a peak of 430,000 in 2012 to an estimated 231,000 in 2024. That marked a new low in the proportion of Taiwanese going abroad to work. The ministry’s annual survey on “Labor Life and Employment Status” includes questions respondents’ willingness to seek employment overseas. Willingness to work in China has steadily declined from
The Legislative Yuan’s Finance Committee yesterday approved proposed amendments to the Amusement Tax Act (娛樂稅法) that would abolish taxes on films, cultural activities and competitive sporting events, retaining the fee only for dance halls and golf courses. The proposed changes would set the maximum tax rate for dance halls and golf courses at 50 and 20 percent respectively, with local governments authorized to suspend the levies. Article 2 of the act says that “amusement tax shall be levied on tickets sold or fees charged by amusement places, facilities or activities” in six categories: “Cinema; professional singing, story-telling, dancing, circus, magic show, acrobatics
Tainan, Taipei and New Taipei City recorded the highest fines nationwide for illegal accommodations in the first quarter of this year, with fines issued in the three cities each exceeding NT$7 million (US$220,639), Tourism Administration data showed. Among them, Taipei had the highest number of illegal short-term rental units, with 410. There were 3,280 legally registered hotels nationwide in the first quarter, down by 14 properties, or 0.43 percent, from a year earlier, likely indicating operators exiting the market, the agency said. However, the number of unregistered properties rose to 1,174, including 314 illegal hotels and 860 illegal short-term rental
RSS