Tags:
Journalism of Courage
MUMBAI, May 2: The global depository receipt (GDR) market showed a lacklustre trend in the bygone week. The mediocre credit policy and lack of investor interest pushed down the GDRs of Indian companies listed on overseas exchanges in London and Luxemburg. The Skindia GDR Index continued to move in a thin band and closed at 942.51 points registering a meagre gain of 0.11 per cent against its previous week’s close of 941.43 points recorded on April 23.
Of the 65 GDRs traded during the week ended April 29, 33 remained unchanged, while 24 lost and only 8 outperformed the market sentiment. Among the gainers were ITC, Bajaj Auto and L&T. The ITC GDR inched up by 5.62 per cent to close at $ 23.50 against its previous week’s close of $ 22.25.
Similarly, the GDR of Bajaj Auto shot up 5.56 per cent to close at $19 and Larsen moved up by 4 per cent to close at $ 13. During the same period, the Skindia GDR price-earning ratio has recorded a meagre gain of 1.56 per cent to close at 20.71 points.
The stagnant moodof the market both local and GDR reflected on the Skindia GDR Index premium which moved in a narrow belt of 17.88 per cent and 22 per cent to finally close at 20.25 per cent registering a net gain of 13.30 per cent. "The announcement of the credit policy aimed at financial liberalisation failed to enthuse the GDR markets," stated a Skindia Finance release.
Mirroring the lacklustre mood despite the announcement of the slack season policy on April 29, the bank stocks continued to move in the southward direction in the absence of buying support. The SBI GDR lost 1.55 per cent to trade at $19 on the day of the announcement. Among other counters which participated in the downward rally, GDRs of SIV Industries fell by 26.67 per cent to close at $0.55, Sail GDR fell by 14.41 per cent to close at $4.75 and Arvind Mills registered a loss of 13.16 per cent to close at $1.65.The prominent feature of the week was Reliance Industry’s results. The announcement of the phenomenal volume growth and net profit rise of 24.94per cent failed to attract buying interest. The GDR of Reliance registered a loss of 2.63 per cent to close at $9.25 on the day of the annoucement.
However, a study conducted by Skindia Finance showed that during 1997-98, Reliance GDR outperformed the Skindia GDR index. The GDR gained 9.38 per cent to close at $ 8.75 with a daily average gain of 0.08 per cent as compared to a loss of 6.13 per cent in the Skindia GDR index.
