GDR index too declines

MUMBAI, JAN 10: Moody's move to downgrade of India's rating and ongoing crisis in South-east Asian markets forced foreign investors to unloa...

MUMBAI, JAN 10: Moody8217;s move to downgrade of India8217;s rating and ongoing crisis in South-east Asian markets forced foreign investors to unload global depository receipts of Indian companies listed on overseas stock exchanges in London and Luxemburg. The Skindia GDR index closed at 870.04 for the week ending on January 8 recording a fall of 2.89 per cent as against last week8217;s close of 895.92 points.

The Skindia GDR index reflected a greater impact of the south-east Asian market upheavals by losing 6.23 per cent since January 1 as against the BSE Sensex which fell by 2.61 per cent over the same period. The Skindia GDR index P/E multiple was ruling at 18.21 for this week as against 18.56 the previous week. 8220;The general investor interest in Asian shares has declined,8221; said an FII source, adding that the sustained fall in South-east Asian companies would affect Indian shares also.

Raymond Woollen was among the top gainer in the GDR market recording a 40 per cent gain over the previous week. Among the other top gainers, GDRs of Lamp;T recorded a rise of 27.27 per cent and IPCL saw a rise of 16.67 per cent. Among the top losers, GDRs of Grasim witnessed a fall of 11.11 per cent over the previous week, while VSNL and Indian Hotels saw a fall of 8.93 per cent and 6.41 per cent.

GDRs of Oriental Hotels was ruling at a premium of 186.99 per cent to its underlying shares in the local market. GDRs of Crompton Greaves and SIV Industries were ruling at a premium of 135.07 per cent and 73.11 per cent respectively.

According to Skindia Finance, while the GDRs of GNFC, Usha Beltron and JCT were trading at a discount to their their underlying shares in the local market. GDRs from the telecom sector took a major beating losing 9.11 per cent followed by hotels and aluminium.

According to a study on the returns from the GDR market, the year 1997 was a year of slowdown with the 63 GDRs providing average negative monthly returns of 1.12 per cent. Although in the first half, 63 GDRs saw returns to the tune of 2.42 per cent and continued to rally, it touched the peak in August with average returns of 10.45 per cent.

The Pharma sector did quite well with average monthly returns of 1.87 per cent while at the same time cable, textile and steel performed the worst registering negative monthly returns of 3.40 per cent, 2.54 per cent and 2.24 per cent respectively. With returns of 9.57 per cent, Dr Reddy8217;s was the star performer during the year. Fertiliser was the only other sector with marginal returns of 0.64 per cent.

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Launched in December, MTNL8217;s GDR has moved in a band of 25.95 per cent as compared to 16.63 per cent in the Skindia GDR Index. Its GDR touched a monthly high of 16.50 December 22, a gain of 37.96 per cent to its issue price. However, trading volume on the BSE hase declined from Rs 17.02 crore one month prior to issue to Rs 12.44 crore. Average premiums for the GDR have increased from 18.20 per cent to 20.55 per cent.