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Senate's nod to lifting of sanctions smothers Kargil effect: FIs buy cyclicals, Skindia GDR Index up 8.39 points to 751.44

The Indian Global Depository Receipts and the BSE Sensex continued to recover during the week ended June 11, following the amendment passsed by the US Senate, for suspending all the economic sactions for five years. The Skindia GDR Index shot up by 8.39 points to 751.44 while the BSE Sensex rose by 79.59 points.

A statement by Skindia Finance stated that the rise could have been much steeper, but the investors were taking a cautious approach before the crucial visit of the Pakistan foreign minister to India.

However, the week saw foreign and domestic financial institutions resume buying in select cylicals. In spite of continuing shelling on the border, the volume of business was relatively high and the undertone was fairly steady.

During the week, the average premia of the 63 depository receipts fell down to 3.91 per cent on June 10 from 6.04 per cent on June 3.

The spreads between the bid and ask of the 39 most actively traded DRs widened to 9.25 per cent on June 10 from 8.99 per cent on June 3.

This week, GDRs of Ashok Leyland touched 52-week high of $ 4.70 on June 9, L&T was at $ 14.98 and Mahindra & Mahindra at $ 6.55 on June 10.

During the week, there were 39 gainers, 17 losers and seven remained unchanged as compared to last week when there were 35 gainers, 11 losers and 17 remained unchanged.

The major gainers for the week were Bombay Dyeing, India Cements and Indo Rama which appreciated by $ 1.18 (0.85), $ 1.00 (0.75) and $ 2.50 (1.88) respectively.

The major losers for the week were Ispat Ind, Core Healthcare and Jain Irrigation which decreased by $ 0.80 (0.95), $ 0.30 (0.35) and $ 0.22 (0.25) respectively.

In the GDR section, Spic registered a highest premium of Rs 44.95 on June 10 followed by Flex Industries Rs 4,569.81 and Bajaj Auto Rs 1,091.92 while in the top discounts list DCW, Tube Invest and Kesoram Industries which registered Rs 6.45, Rs 37.28 and Rs 21.51 respectively.

In the first quarter of calendar 1999, the stock had declined by 7.14 per cent in the GDR market and 4.55 per cent in the domestic market as against an advance of 9.56 per cent in the Skindia GDR and 22.21 per cent in the BSE Sensex.

The daily turnover of the shares also moved up to an average of Rs 58.9 million in April-June period from a daily average of Rs 35.9 million in the first quarter.

The price difference between the GDR and share has been pretty consistent. The GDR in the first quarter traded at an average of 19.40 per cent while it is 19.60 per cent for the April-June period.

UNI

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