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Skindia GDR dips a marginal 2.98 points

The Indian Global Depository Receipts declined marginally while the BSE Sensex rose higher during the week that ended on March 11, 1999.

After a Budget friendly to the capital market, there was hectic buying of stocks by both foreign as well as domestic funds. As a result of which the markets entered the over-bought zone, thus the technical correction due happened this week in both the GDR and the domestic markets.

Due to the correction the Skindia GDR index fell a marginal 2.98 points by the end of week, while the BSE Sensex rose by 71.55 points. As overall the sentiment remains steady and the outlook for India remains positive, the average spread of the 38 most actively traded GDRs reduced from 9.14 per cent on March 4 to 8.71 per cent on March 11, 1999. The average GDR premium over the underlying shares of 61 GDRs moved up from 4.87 per cent on March 4 to 5.32 per cent on March 11.

Skindia finance stated in a statement, during the week, 61 GDRs on an average lost by 1.62 per cent and the shares 2.04 per cent. In GDRs, power sector as the major gainer with a rise of 7.05 per cent followed by pharma and cement with 5.85 per cent and 4.88 per cent respectively. The major losers were steel, aluminium and textile sectors losing by 7.22 per cent, 6.79 per cent and 5.50 per cent respectively.

In shares, the top gainers were from power (5.71 per cent), pharma (4.76 per cent) and auto (0.83 per cent). The top losers were aluminium (7.62 per cent), steel (5.92 per cent) and fertiliser (4.9 per cent).

During the week, 14 GDRs were gainers, 30 losers while 18 remained unchanged out of the total of 61 GDRs. The top gainers for the week were Dr Reddy's, which appreciated by 20 per cent to US dollar 18.00, Flex Industries 14.29 per cent to US dollar 0.4 and Core Healthcare 11.11 per cent to US dollar 0.5. The top losers for the week were Kesoram Ind, which depreciated by 12.50 per cent to US dollar 0.35, DCW 12.50 per cent to US dollar 0.88 and Ispat Ind 12 per cent to US dollar 1.1.

After an unsuccessful attempt by BPL Cellular Holdings, in December 1996, this week on March 11, Infosys Tech made a successful issue of 2.07 million ADRs at an offer price of US dollar 34, collecting US dollar 70.38 million. The stock listed on the Nasdaq, opened at US dollar 37.0375, touched a high of US dollar 50 before closing at US dollar 47, a premium of 38.24 per cent over the issue price and 24.07 per cent over the BSE closing price of Rs 3,201.00 (L&T domestic share equals two ADRs).

Such a good response to the Infosys ADR caused some enthusiasm in the domestic bourses and most of the information technology stocks were quoting at high premiums to their previous closes.

Another significant happening of the week was the passage of the patents bill in the Lok Sabha, which initially led to euphoria over pharma stocks on the day of passage (March 10, 1999). Most of the scrips in this sector touched the circuit. But the same effect was not witnessed in the GDR markets.

There, only Ranbaxy appreciated 4.93 per cent to US dollar 13.3, while all the other stocks core health, Dr Reddy's and Wockhardt remained unchanged. This was probably because the news of the passage of the bill had been discounted in December 1998, when during the winter session of Parliament the bill was almost certain to go through.

UNI

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