Global Markets Open Smoothly in Early Y2K Trading

Asian financial markets opened seamlessly today, apparently free of the “millennium computer bug” that had threatened to bring the world’s trading systems crashing.

But a fuller picture will emerge only when billions of people worldwide return to work today. They might find glitches that take months to resolve. Financial markets in Tokyo and London were closed today for the New Year’s holiday. They reopen Tuesday.

But on Sunday evening, U.S. futures dealers executed the first major market trades of 2000, and the Chicago Mercantile Exchange reported a glitch-free start.

“Everything is running smoothly,” said CME spokesman Bill Burks.

Joining the CME in leading the planet’s top capital markets into their first full-fledged live test for Year 2000 glitches, the Chicago Board of Trade launched Treasury bond, grain and soybean dealing Sunday.

U.S. Treasury bond futures eroded to a fresh contract low in relatively active dealings, traders said. Volume remained very light overall in other futures contracts with key global markets closed today.

The first major stock, bond and foreign exchange trading of 2000 began in Singapore and Hong Kong, where no Y2K problems were detected. Stocks rallied in most Asian countries open for trading today, as investors who had held back from making new bets in the final months of last year bought shares anew. Asia was widely predicted to be the source of many computer-related malfunctions, as companies here have been strapped for cash in recent years after some of the worst recessions on record.

Singapore and Hong Kong conducted tests Saturday during which all stock exchange members from both countries passed.

At midday, Hong Kong’s Hang Seng index was up 232 points, or 1.4%, to a record 17,194.62. Singapore’s Straits Times index was up 2.6% to a record 2,544.31.

Asian currency markets were subdued with Tokyo and Sydney shut and players still cautious about computer glitches. Asian currencies outside Japan rose on hopes that risk-averse investors will return to the region.

Currencies in Indonesia, Thailand and the Philippines gained the most. The Indonesian rupiah rose 2.1%, the Thai baht is up 1.5% and the Philippine peso is up 0.8%.

“The Y2K was a nonevent; we should see foreign funds coming back into the region and parking their funds,” said Yang Sy Jian research director at Kay Hian Holdings Ltd., a Singapore brokerage.

Some banks in China experienced glitches with their e-mail systems, problems they said were not a result of Y2K. There was one error in which a department store read a credit card as being expired when it was not, a problem that was a result of the date.

“Even in our normal working days, such problems can occur,” said Tan Guoan, a People’s Bank of China division chief.

Still, bankers and traders across the region are breathing a sigh of relief that the region avoided major breakdowns.

“We’re so relieved that there were no Y2K problems anywhere,” said Woon Chin Chan, an accountant, who had stayed home on New Year’s Eve to avoid being caught by power and traffic problems.

In the U.S., the Federal Reserve said its 24-hour command center was keeping up the vigilance. But staff were relieved after no problems turned up processing checks and electronic payments for several hundred customers. The U.S. Treasury even held a successful mock bond auction.

“Obviously we are confident, but there is still a question mark,” said Doug Tillet, spokesman for the Federal Reserve Bank of New York.

Bug-free trading proceeded in a handful of stock exchanges that were open during the weekend--Bangladesh, Oman, Kuwait, Egypt and Bahrain--with many reporting modest gains as Y2K jitters eased.

European bourses, central banks and regulators reported all systems were ready to go when trading resumes today in most continental European countries.

Japan’s financial watchdog, the Financial Supervisory Agency, reported minor glitches at one foreign bank and 15 domestic brokerages. But it said 14 of the 15 brokerages had already fixed the problems and predicted no major headaches.

The relatively glitch-free days following the calendar rollover prompted communist-run Cuba to suggest the Y2K bug was nothing more than a capitalist-hatched plot.