Bloomberg News

Soaring Volume Overwhelms Mexico’s Bolsa as Trading Halted

May 31, 2012

Mexico’s stock exchange halted trading today 12 minutes before the usual close after a surge in orders overwhelmed its systems.

Bourse operator Bolsa Mexicana de Valores SAB (BOLSAA:US) stopped trading today at 2:48 p.m. local time and didn’t resume.

“The system became very slow in its response times,” Jorge Alegria, the head of markets and information at the stock exchange, wrote in an e-mailed response to questions, citing an “overload” of transactions. “To avoid unfairness in the operations, trading was suspended.”

The IPC index fell 0.5 percent to 37,872.95 before the halt. Trading volume on the IPC surged 305 percent to 912 million shares, the most since Aug. 31.

Volume of America Movil SAB (AMXL), the phone company controlled by billionaire Carlos Slim, and Wal-Mart de Mexico SAB was more than six times the average for the past three months, according to data compiled by Bloomberg.

In the 10 minutes before the halt, shares of Wal-Mart de Mexico, the second-largest company on the IPC by weighting, fell about 2.1 percent, extending the day’s losses to 5.1 percent. The shares closed at 34.67 pesos.

Bancomer Casa de Bolsa, the local brokerage unit of Banco Bilbao Vizcaya Argentaria SA, operated more shares of IPC stocks than any other brokerage today with 418 million shares, data compiled by Bloomberg show. Bancomer’s brokerage has been the seventh biggest in Mexico by gross volume this year.

The stock exchange is rebalancing the IPC index tomorrow, according to a statement today from Bolsa Mexicana. America Movil’s weight on the index will decline to 24.9 percent from 27.3 percent while Wal-Mart de Mexico’s weight will fall to 11.6 percent from 11.7 percent, Bolsa Mexicana said.

The so-called administrative recesses are activated occasionally by Mexico’s exchange and are usually linked to software glitches. Last month, erroneous trades by Bulltick Capital Markets’s brokerage in Mexico sparked a market collapse in what regulators said may have been the worst trading mistake in the country’s history.

To contact the reporters on this story: Carlos Manuel Rodriguez in Mexico City at carlosmr@bloomberg.net; Jonathan J. Levin in Mexico City at jlevin20@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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