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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Bosco who wrote (9529)	2/1/2001 3:44:31 PM
From: Kenneth E. Phillipps	Read Replies (1) \| Respond to of 14638

Toronto Exchange Halted Nortel Trading, Skewing Index (Update1) By Cheryl Devoe Kim Toronto, Feb. 1 (Bloomberg) -- The Toronto Stock Exchange halted trading in five stocks yesterday, including Canada's largest company, Nortel Networks Corp., after recovering from a system failure that had stopped trading for 26 minutes. As a result, the closing level of the Toronto Stock Exchange 300 Composite Index was higher than it would have been, and today's relative drop in the index is deeper. The disruption meant Nortel's 4 p.m. closing price in Toronto was higher than its closing price in the U.S., where Nortel shares are also traded. Normally, the two prices would be about the same, allowing for currency difference. Nortel closed yesterday at C$58.61 ($39.09) in Toronto and $38.23 in New York. The TSE's trading system failed at 3:25 p.m., and trading in all stocks was halted for 26 minutes. Soon after trading resumed at 3:51, five stocks were halted until the 4 p.m. closing. ``Because of the problems that we were having with the (trading) engine, we decided on stocks to shut down to maintain trading and integrity in the rest of the market,'' said TSE spokesman Steve Kee. Nortel didn't trade in Toronto from 3:54 p.m. to 4 p.m. The other shares blocked from trading were Quebecor Inc. Class B shares, Shell Canada Ltd., Power Financial Corp., and Tesco Corp. Problem After Restart Those stocks were halted because each appeared to have a problem in its trading activity after the resumption, Kee said. A press release issued by the TSE after trading resumed didn't disclose that some stocks could be blocked from trading. The problem that caused yesterday's failure is ''still under investigation,'' he said. There were eight days last year when the TSE's trading system failed, Kee said. The main trading engine, the sole remaining part of the old Computer Assisted Trading Systems, known as CATS, will be replaced sometime this year, he said. Failures of the Toronto trading system damage the reputation of the exchange, said James Niosi, head of trading at Charles Schwab Canada Co. ``I think it tarnishes a bit,'' Niosi said. ``You don't want to take business away from the TSE, but by the same token you have a fiduciary responsibility to your client.'' When activity is interrupted in Toronto for stocks that are also listed in the U.S., trades are diverted to the U.S. exchange. If nothing else, the exchange is becoming adept at letting traders know when a problem arises. ``Their messaging was instantaneous,'' Niosi said. ``I think the way that they handled it was quite good.'' Nortel makes up about 20 percent of the Toronto Stock Exchange 300 Composite Index, so its movement often dictates the direction of the benchmark. When trading resumed in Toronto this morning, Nortel's stock dropped to catch up with the U.S. price. That meant the TSE 300 fell about 45 points more than it otherwise would have.