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Shortfall on NSE, but no crisis

Calcutta, April 11: Even as the National Stock Exchange (NSE) scotched reports of a payment crisis, it admitted to a significant shortfall in the settlement that took place on Wednesday.

The shortfall is understood to be in the region of Rs 5,060 crore, or a little over 9.5 per cent of the total settlement value; the gap normally does not exceed 0.5 per cent.

A spokesperson for the bourse said: “It was a combination of cash and securities shortfall, but the problem was restricted to a few shares.”

He, however, refused to divulge the identity of the brokers who defaulted or the securities that were short-delivered.

A similar shortfall hit the bourse on Friday last. Payments — both in cash and securities — for three settlements were made that day.

In two of them, the shortfall was more than normal. The combined shortfall of the two settlements was around Rs 15 crore, or in the region of 22.5 per cent of the settlement value.

These shortfalls are confusing as they happened even before the technology meltdown had begun. All eyes are now set on the margin payment on Saturday, which brokers believe might not go through as smoothly as the exchanges want people to believe.

Tomorrow, brokers will have to pay margins for their positions on Thursday. Friday being a bank holiday in the western region, brokers got an extra day to rustle up funds.

Though NSE ruled out any possibility of a payment crisis, people on the Street believe that over 150 brokers of the two main bourses could be suspended for non-payment of margins. Even some of the leading retail brokerage houses are reported to be in difficulty.

The NSE spokesperson refused to give specific figures for brokers deactivated since Thursday despite being asked several times. He reiterated that there was “no payment crisis” and the “rumours were baseless”.

The problem was limited to top-rung technology stocks so far. But if a large number of brokers fail to pay up their margin dues tomorrow, all frontline stocks — even bellwether old economy shares — could face hammering, as the defaulters would be forced to sell everything at hand to fulfil payment obligations.

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