Wrong code leads to $30m error

A trader at a small Japanese stock brokerage bungled the market debut of Web advertiser Adways this week when he entered the wrong trading code and mistakenly sold $30 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 offer 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 each last December instead of the intended one share at 610,000. The mistake cost the brokerage about $540 million.

Adways' stock first traded at 1.47 million ($20,492), up 5 per cent from its IPO price of 1.4 million.

Tachibana placed the errant sell order just after trading opened at 9am local time. It offered 2600 shares at 1670 each - a small fraction of Adways' debut price.

The Tachibana trader had intended to sell shares in CDG, which has a similar trading code to Adways, but its share price is much lower.

The trader quickly cancelled the order, but not before 1482 trades were settled, a number equivalent to just under 10 per cent of Adways' shares.

Adways chief executive Haruhisa Okamura, who owns a 37 per cent stake in the firm, said he would be willing to lend shares to Tachibana to help it settle the trade.

- REUTERS