Concern grows over Net frenzy
Saturday 11 December 1999
In the past six weeks more than 2 billion shares have changed hands on the London Stock Exchange each day, compared to an average of 1.3 billion.
One private investor in Warwickshire said she began noticing problems six weeks ago in getting through by telephone to Charles Schwab, the US- owned brokerage she has used for three years.
Laura Quirke, a marketing consultant, who usually deals three or four times a week, said: "In the last few weeks it has been virtually impossible to use the telephone service, so we are now forced to trade on the Internet."
But this service is also in danger of disintegrating, she claimed. On Thursday morning she said "it was impossible to get on to the equities trading page. The consequence is that not only are we unable to do deals as and when we choose, which costs us money; we are from time to time totally unable to control our stocks simply because we cannot get instructions through to Charles Schwab." She said she had been unable to pass her complaints to the company either by phone or e-mail.
A spokeswoman for Charles Schwab said yesterday that customers could not get through for two hours because phones were jammed by the flood of buyers. She said the company is urgently recruiting staff for its Birmingham head office to cope with the surge in orders.
She denied that there were any problems with the Internet site, but conceded that "the trading page may have been a bit slow on Thursday morning".
The near-doubling of share buying volumes by private clients in the past month is worrying both regulators and the broking industry itself. One broker, Yorkshare, had its busiest day ever on Wednesday.
"Over the last month volumes have doubled," said Chris Ring, managing director of NatWest Stockbrokers. "Clients are snapping up all the hi- tech and AIM stocks." Barclayshare is turning new clients away as it simply can't cope with the avalanche of orders for hi-tech and telecoms shares.
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