Mumbai, July 13: The Skindia GDR Index has yielded annualised returns of 52.11 per cent in the first half of the year. This upsurge has been necessarily contributed by Dr Reddy's GDR which experienced a return of 466.67 per cent, followed by Reliance with 154.15 per cent and ITC with 146.60 per cent.

However, SIV Industries registered negative returns of 80 per cent followed by Tube Investments with 75 per cent and Usha Beltron with 66.67 per cent.

As per the study of Skindia Finance the performance of the GDRs of pharmaceutical industry has been remarkable with an average positive return of 133.20 per cent.

Similarly, cement industry GDRs followed by registering returns to the tune of 56.14 per cent and fertilisers with 46.87 per cent.

On the contrary, GDRs from textile, steel and cable fared badly with negative returns of 37.74 per cent, 32.38 per cent and 21.57 per cent respectively.

Attractive valuations of Indian equities vis-a-vis other Asian stocks has led to frenzied buying by foreign funds in both the GDR and domestic markets.

The GDR market had raced ahead of the domestic market during the period May 29 to June 20. However, it remained relatively slow during the first two weeks of July. During the week ended July 10, the Skindia GDR index registered a meagre gain of 0.79 per cent to close at 83.30 points, against its previous week's close of 82.65 points recorded on July 3.

In the meanwhile, for the same period the BSE Sensex increased by 9.64 per cent to touch a new high of 4,448.06.

The 64 GDRs gained an average 2.72 per cent during the week against a 8.06 per cent rise in their underlying shares resulting in average premiums falling from 23.34 per cent in June to 17.56 per cent in week ended July 10.The Skindia GDR index premium saw a sharp decline of 9.51 per cent from 21.66 per cent to 19.60 per cent.

However, Jain Irrigation continued to be quoted at a premium of 57.92 per cent over its underlying share price of Rs 22.65, Oriental Hotels at a premium of 53.30 per cent and Videocon International was priced at a premium of 49.26 per cent over its domestic share price of Rs 34.75.

GDRs of Indo Rama, CESC and EID Parry recorded gains over their previous week's close by 36.36 per cent, 24.62 per cent and 16.67 per cent respectively.

VSNL's GDR, however, registered a loss of 9.01 per cent to close at $ 18.88 against its previous week's closing price of $ 20.75.

Tata Electric and Ranbaxy Labs GDRs also recorded losses to the tune of 8.89 per cent and 5.15 per cent at $ 410 and $ 23 respectively.

The depository receipt (DR) update presented by Skindia Finance brings to light the fact that the DR market experienced rapid growth in the first half of 1997 with the dollar trading volume on US exchanges (NYSE, NASDAQ and AMEX) valued at $ 221 billion going up 27 per cent over the same period last year.

Since 1990 the compounded annual growth rate of DR's dollar trading volume has been 25 per cent.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.