JSE widens 'trigger points' amid massive volatility

As the JSE remains in the grip of panic selling amid the coronavirus crisis, the bourse operator says it will do what it takes to keep the market trading.

In light of massive turbulence, it has widened trigger points for shares that halt trading when they fall too far, to fast. 

Last week, the JSE lost 15% of its value, and had two of its worst days on record. Then on Monday this week, the all-share index was down by 12% at one point during the day - which was more than its record fall of 11.7% in 1987. It ended the day 8.3% lower.

In the US, trading on Wall Street has been repeatedly halted because share declines have exceeded the maximum trigger points. This has happened on a number of markets.

In the Philippines, its market was completely shut for a couple of days.

The JSE said while it experienced extreme market volatility and unprecedented volumes over the past two weeks, it had no interruptions in trading and all traded securities went through clearing and settlement without delays. 

JSE CEO Dr Leila Fourie said the exchange has engaged with critical service providers and market participants and remains of the view that  open.

She said unless unforeseen or exceptional circumstances arise, the JSE will maintain its usual business operations and market hours.

"A fundamental part of running a fair market is to enable free market forces to play out. Our role at the exchange is to ensure that we run orderly and fair markets, allowing companies access to capital and investors to trade in these volatile times," said Fourie.

The exchange said it confirmed remote working capabilities with market participants as more companies are encouraging people to work from home, but most importantly to ensure system continuity if the pandemic escalates locally.

The exchange said the circuit breakers that triggered trade halts in other markets are also present in South Africa and the JSE has .

"The JSE has circuit breaker triggers on an instrument – stock or contract – level, which enforce temporary trading halts for periods of 5 minutes at a time," read the exchange’s statement.

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