By Bernd Debusmann Jr
The move is being taken to help address the challenges posed by the coronavirus epidemic
Boursa Kuwait has announced that from today (March 15), the security circuit breaker will be modified by reducing the low limit from -10 percent to -5 percent amid the ongoing, while maintaining the upper limit at 10 percent.
In a statement, Boursa Kuwait said that the move was taken as part of a wider effort to “address the fast-paced changes and turbulences facing the local exchange market, as well a regional and international exchanges, as a result of the Covid-19 outbreak.”
“It also follows the major drop in oil prices globally, which has led to a state of extreme volatility of listed shares prices and halted market trading in Boursa Kuwait,” the statement added.
The move is in compliance with Boursa Kuwait’s rulebook, which allows it to intervene in challenging conditions and take actions required to ensure the protection of all dealers and minimise any negative impacts.
“In the event a drop or increase occurs for any security,, the modification allows dealers to enter buy or sell orders after pausing the security for a time frame of two minutes,” the statement noted. “During these those two minutes, an auction takes place to define the new reference price, while giving priority to orders based on the current operating system.”
The number of shares entered in the auction must comply to the Normal Market Size (NMS) specified, in proportion to the daily average trading, the statement added.
In a separate statement on Saturday, Boursa Kuwait listed a number of precautionary measures it is taking as a result of the coronavirus pandemic, including closing the bourse building for the public, enforcing sterilisation measures and reducing the number of workers at the building at any given time.