| Japanese IT company Livedoor crashes the Tokyo Stock Exchange The world's second largest stock exchange, Tokyo Stock Exchange (TSE), was forced to close trading 20 minutes earlier than expected yesterday. For such a large platform, this in itself is extraordinary, and considering that it stopped at the very peak of sales and panic on the stock exchange, the event can be classified as scandalous. The fact is that the day before, as local newspapers reported, the Japanese Internet company Livedoor Co. turned out to be suspected of fabricating financial statements: its management was accused of providing deliberately false information to investors, after which law enforcement agencies began to thoroughly search its offices. As a result, private investors began to rush to get rid of Livedoor shares, as well as the securities of telecommunications companies in general. The sharp increase in the volume of offers led to a failure in the computer system and, ultimately, to a complete stop in trading. The limit of 4.5 million transactions set by the TSE electronic system was probably exceeded, experts say.
Just before the TSE closed, the blue-chip Nikkei index was down nearly 3% to 15,341.18. This drop was the largest since April last year. As Reuters notes, this week the stock market value of shares on the market collapsed by more than $300 billion. The Japanese currency did not remain indifferent to the stock unrest; during the day yesterday the rate fluctuated noticeably: at first it fell to 115.88 yen per dollar. but by the end of the day it had recovered to 115.60.
The country's authorities, as well as Japan's Financial Services Authority (FSA), immediately began trying to restore calm in the stock market. Prime Minister Junichiro Koizumi assured that the drop in quotations is a “temporary phenomenon.” Speaking to reporters, he said Japan's economy continues to make a steady recovery after its longest period of depression. Finance Minister Sadakazu Tanigaki strongly wished TSE a speedy recovery. “The stock exchange is part of the country's core infrastructure and it is very sad that trading had to be stopped,” he told Reuters. -- The stock exchange and the FSA must act quickly. Ensuring the viability of the system is necessary to preserve the reputation of the Tokyo market." The management of the exchange, despite pressure from the Ministry of Finance, does not share optimism about the speedy recovery of the TSE. According to the president of the exchange, Taizo Nishimuro, a shortened version of trading is also quite possible today.
Analysts, meanwhile, are speculating on the seriously tarnished reputation of TSE. After all, this is not the first failure that resulted in trading being suspended. Last year, problems with the computer system forced the exchange's management to block trading for a whole day. In this regard, many experts are no longer talking about the speedy resumption of the trading session, but about restoring the image of the Tokyo site.
The culprit of yesterday's crash on the TSE - Livedoor - is now the most famous Japanese Internet company. After several major acquisitions, its market value increased to $6.3 billion. Therefore, it is not surprising that opinions are increasingly being voiced that the TSE can be restored only after the Livedoor scandal is resolved. The company's management persistently denies any accusations against it. Denis UVAROV |
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