Wrong code by broker leads to 19-mn error

A trader at a small Japanese stock brokerage bungled the market debut of web advertiser Adways Co Ltd on Tuesday when he entered the wrong trading code and mistakenly sold 18.7 million worth of shares in the firm.

A trader at a small Japanese stock brokerage bungled the market debut of web advertiser Adways Co Ltd on Tuesday when he entered the wrong trading code and mistakenly sold 18.7 million worth of shares in the firm.

Adways benefited from the error, however, as investors bid the shares up by 19 per cent over their initial public offering IPO price on expectations that the broker, Tachibana Securities, would have to buy back the shares it sold.

Japanese stock markets have been hit by a series of trading errors in recent months. In the most serious, a trader at Mizuho Securities mistakenly offered 610,000 shares at 1 yen each last December instead of the intended one share at 610,000 yen. The mistake cost the brokerage about 335 million.

Adways8217; stock first traded at 1.47 million yen 12,730 on the Tokyo Stock Exchange8217;s Mothers market for startups, up 5 from its IPO price of 1.40 million yen. It had last changed hands at 1.43 million yen when the market closed, with a glut of bids waiting at its daily limit of 1.67 million yen.

Tachibana placed the errant sell order just after trading opened at 9 am local time. It offered 2,600 shares at 1,670 yen each8212;a small fraction of Adways8217; debut price. The Tachibana trader had intended to sell shares in CDG Co Ltd another stock that debuted on Tuesday, the brokerage said.

CDG has a similar trading code to Adways8217;, but its per-share price is much lower. The trader quickly cancelled the order, but not before 1,482 trades were settled, a number equivalent to just under 10 of Adways8217; outstanding shares. 8220;It was an input error. The trader noticed the mistake immediately and cancelled, but it was too late to stop some of the shares from trading,8221; Tachibana vice president Takahiro Tsuchiya told a news conference.

He said the firm could not calculate the size of its loss on the trade until it bought back the shares, something it was unable to do on Tuesday due to the glut of bids.