A couple of days ago, I realized that I was unable to buy any stocks using the platform access given to me by the broker firm, and when they were contacted immediately to know the reason why my ability to buy was brought to near zero rupees, the reply I received was astonishing and alarming.
My current portfolio is worth a couple of million rupees and has a healthy unrealized gain worth another couple of million rupees, yet the broker firm was not willing to give me any usable buying power.
The reason they give is that many have bought shares on credit and are not willing to settle their dues.
When asked as to why not “force sell” available shares of such people and recover their dues, they had no answer.
I have spoken to a few more stockbroker firms and they all have the same song to play, which means that there is a very big credit exposure across the board but either instructions or guidance received from the governing body regulating the market activities and or their own management not to restore to force selling to avoid a meltdown of the market in a couple of days.
If that is the case and real investors realize the same (not gamblers), the 5% safety barrier currently in place in the system will not be able to cope with the situation, unless the market is kept closed for an indefinite time to cool off at its own time and pace.
Finally, among all the negative news swirling around, it was a sad thing to know that we have finally reached the Catch-22 situation in investing too.
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