Mumbai, Dec 20: Reflecting the change in market sentiments, the Skindia GDR index recovered to touch a high of 864.98 points on December 18, recording a gain of 7.78 per cent over its previous week's close of 802.56 points on December 11.

The 65 GDRs gained an average 2.45 per cent each, with the Skindia GDR index premium closing at 19.14 per cent registering a gain of 29.34 per cent. The GDRs of NEPC India, Oriental Hotels and Crompton Greaves continued to trade at a premium of 172.50 per cent, 161.60 per cent and 158.73 per cent against its underlying share price of Rs 3.60, Rs 270 and Rs 22.75 respectively. GDRs from the telecom, fertiliser and pharma sector were the major gainers during the week, moving up by 5.73 per cent, 5 per cent and 4.62 per cent respectively.

However, the textile industry continued to remain out of the recovery band and lost about 0.89 per cent. Also the GDRs of Crompton Greaves, Ashok Leyland and India Cements continued to decline registering losses to the tune of 14.29 per cent, 12.14 per cent and 10 per cent respectively.Among the top gainers was ITC, which zoomed up to touch a high of $19.75, registering a sharp recovery of over 19 per cent over its previous week's close of $16.50. United Phosphorous registered a gain of 16.67 per cent to close at $3.50 on December 18, and BSES closed at $ 15.50 recording a gain of 14.81 per cent over its previous week's close.

During the period between December 11 and December 18, the Skindia GDR index Price earning ratio recorded a gain of 5.19 per cent to close at 17.96 points over its previous week's close of 17.07 points.

A study conducted by Skindia Finance, on the local prices of companies that had issued GDRs in 1996, reveals that these companies underperformed the BSE Sensex by 16.84 per cent over a period of one year after issue.

Nine companies issued GDRs in 1996, including BSES, SBI, ICICI, Telco, Larsen and Sail.

Average prices for the scrips were taken over a period of four quarters after the GDR issue, with a base of average prices of one year prior to the issue.

In this list of 9 issues, only BSES outperformed the BSE Sensex in all the quarters gaining 15.93 per cent in the first quarter, 29.60 per cent in the second, 37.12 per cent in the third and 56.91 per cent in the fourth quarter.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.