Technology helped stock markets function despite violence in MumbaiOctober 21st, 2008 - 7:41 pm ICT by IANS
Mumbai, Oct 21 (IANS) Satellite-based communications technology helped Indian stock markets to remain functional Tuesday despite large-scale violence across the country’s commercial capital, following the arrest of a state-level politician.The supporters of Maharashtra Navnirman Sena wreaked havoc here, setting on fire 38 buses, damaging 350 taxis and injuring several people by pelting stones, to protest the arrest of their leader Raj Thackeray. Police were forced to fire tear gas shells and resorted to baton charge to control the mobs, which disrupted normal life in the city.
But despite all the mayhem, the 133-year-old Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) functioned smoothly and there were no disruptions in trading. Key market indices of these bourses also moved up.
All this was thanks to an online trading system called BSE On-line Trading (BOLT) that has facilitated screen-based trading in securities since March 1995. It operates in 25,000 trader workstations across more than 450 cities in the country.
“In February 2001, BSE also introduced the world’s first centralized exchange-based Internet trading system - BSEWEBX.com. This initiative enables investors anywhere in the world to trade on the BSE platform,” according to its website.
“Today, there is no need for traders to be physically present on the trading floors and cry themselves hoarse to make deals as it was done in the past,” said a member of the exchange.
“Technologies make sure that trading on these exchanges can go on undisrupted even if there is violence across the city.”
The BSE has a market capitalization of more than $1 trillion, and with 4,700 companies affiliated with it, it the world’s biggest in terms of number of listed firms. It is the fifth in transaction numbers and Asia’s oldest bourse, operating since in 1875.
After the BSE, the second largest bourse in India, the National Stock Exchange also functioned smoothly, as it also has an electronic stock exchange using the National Exchange for Automated Trading or NEAT system since its inception. Trading began on the NSE in June, 1994.
Both BOLT and NEAT use very small aperture terminals (V-Sat) and 64 kbps or kilobytes per second leased lines and satellite-based technology to connect traders to the virtual market place.
Set up by CMC, a former state-run firm that is now part of India’s multi-business conglomerate the Tata Group, BOLT allows brokers/traders to operate from their own offices and connect to the central trading engine (CTE) through the broker work station (BWS).
Through a mechanism called broadcast of market information, the buy and sell orders placed by the broker/trader are matched at the best available price in the market for that scrip, at the time of the order.
Subsequent to matching, trade confirmations are sent to the respective workstations, which can be printed on-line.
At the NSE each trading member trades on the NSE with other members through a personal computer located in the trading member’s office, anywhere in India.
The trading members on the various market segments are linked to the central computer at the NSE through dedicated 64Kbps leased lines and V-Sat terminals.
NSE is one of the largest interactive V-Sat based stock exchanges in the world.
Currently, BSE and NSE combined have a total of around 50,000 terminals around the country for real time online trading on these exchanges.