Asia’s sting reaches GDR market

Market circles said fears over the stability of China’s yuan and Hong Kong’s floundering markets affected other markets as well. Hong Kong stock market has already sunk to its its lowest ebb in three and a half years on the currency jitters. Sensex of the Bombay Stock Exchange also lost 149 points at 3062.25 during the week.

Among the GDRs, companies in the power, cement, and textile sectors were adversely affected on account of thepessimistic mood of the market. While the power sector GDRs lost about 16.35 per cent in terms of market price, cement lost 16.19 per cent and textile sector lost 13.09 per cent.

However, GDRs of cables, steel and pharma continued to move in the northward direction despite the negative mood of the market operators. The cable sector GDRs gained 10.75 per cent while those of steel and pharma gained by two per cent and 1.93 per cent respectively. During the same period, the Skindia GDR Index price earning ratio dipped by another 4.09 per cent to close at 14.40 points while the Skindia GDR premium index fell by 12.53 per cent to close at 12.23 per cent.

GDRs of GE Shipping, Usha Beltron and Wockhardt continued to hog the limelight and witnessed a price appreciation of 36.20 per cent, 25 per cent and 10 per cent respectively. However, GDRs of Flex Industries, United Phosphorus and Siel plunged by 66.67 per cent, 42.86 per cent and 37.50 per cent respectively.

A study conducted by Skindia Finance on thevolatility of indices shows that the Skindia GDR Index witnessed greater volatility of 2.75 per cent in the first half of 1998 against 1.67 per cent in the first half of 1997. Correspondingly, the BSE Sensitive Index increased to 1.95 per cent from 1.64 per cent. Out of 63 GDRs, excluding MTNL and VSNL, 13 did not show any price movement in this year.