Human error adds 84 points to fall

Posted on 11.21.06 by StockPK Team @ 11:14 am    

Human error caused a technical fault in trading software (KATS) at KSE following Arif Habib Securities bonus announcement. The fault contributed 84.11 points to the total decline of 275.21 points in 100-Index on Monday, The news learnt.

KSE press statement added that Arif Habib Securities Limited (AHSL), a component of KSE-100 Index had announced a 122.22 per cent bonus at the time of sending their financial results for the quarter ended September 30, 2006. The book closure for determination of the entitlement of this bonus issue was notified from November 20 to November 26, 2006.

Accordingly, the scrip was to trade on ex-bonus basis from today i.e., November 20, 2006. Ex-bonus price of the scrip on the basis of the 122.22 per cent bonus should have been Rs243. But due to human error, a mistake was made in the calculation of ex-bonus price of the scrip, which after adjustment of the bonus, was calculated at Rs441.82 instead of Rs243.

The trading started with this incorrect price of Rs441.82 at 9.45 am and continued for about 5 minutes. During this period 153 trades were recorded in this scrip.

However, when the error was identified, trading in the scrip was immediately suspended in order to avoid further trading in the scrip with incorrect price. The trading remained suspended for about one and half hours and the trading was thereafter resumed on the basis of correct bonus adjusted price of Rs243. However, as the mistake was rectified during the trading hours, the impact of this computation mistake had already been absorbed by the index at the close.

Source: The News