MUMBAI, February 7: After long weeks of dull and weak trading, confidence seemed to have bounced back on the global depository receipt (GDR) market. With GDRs of Indian companies listed on overseas bourses making smart gains, the Skindia GDR index has leapfrogged from 793.85 (January 30) to 848.92, gaining 55.07 points during the week.According to foreign fund managers, this has been the highest weekly gain seen since December 18 and was attributed to a gradual improvement in the South-east Asian markets.
The Skindia GDR index premium was quoting at 22.24 per cent during this week between January 29 and February 5 as against the average of 18 per cent in January. According to marketmen abroad, expansion in premiums indicate that the GDR market is anticipating that the worst of the correction is nearly over. During the same week the GDR index P/E was ruling at 17.55. Among the top gainers in the GDR market, Hindalco recorded an rise of 15.87 per cent, while L&T and VSNL saw a rise of 13.16 per cent and12.77 per cent respectively. The top losers were SAIL which recorded a fall of 7.10 per cent, Indian Hotels (5.88 per cent) and Ashok Leyland (4 per cent).
GDRs of Oriental Hotels were ruling at a huge premium of 208.66 per cent to its underlying share in the local market. Crompton Greaves and Jain Irrigation were quoting at premiums of 171.93 per cent and 107.59 per cent respectively. Among the GDRs trading at a discount Usha Beltron was ruling at a discount of 36.77 per cent while SIEL was traded at a discount of 10.32 per cent and Ashok Leyland 9.35 per cent.
According to a study, the Skindia GDR index has a low co-relation with the most tracked international indices of the world. Among the Dow Jones, FTSE and Hang Seng, the GDR index has the highest co-relation with Hang Seng index. Though the Indian GDRs are widely traded on the London Stock Exchange, the Skindia GDR index has showed the lowest co-relation with the FTSE 100. The GDR issue of Concor has been put on hold till after the elections whilethe disinvestment commission has ruled against a second VSNL GDR issue for the time being. Concor was one of the three PSUs which were to tap the GDR market before March 31.
Originally, the government was to divest 10 million secondary shares and issue two million fresh shares in Singapore on Wednesday. The benchmark domestic price of Concor was Rs 420 and its investment banker, JP Morgan, had reportedly indicated that the deal might have to be priced at a discount to the market price.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
