Investor interest in GDRs revives

“The dilution of sanctions imposed on India by the US and the patch up between BJP and the the AIADMK leader has given way to a positive outlook from the FIIs towards India,” said Skindia Finance. This has been clearly indicated by the 11.99 per cent rise in the Skindia GDR index which closed at 727.59 as against the previous week’s close of 649.68.

The BSE sensex gained 312 pointsrecording an increase of 4.76 per cent. Other factors which attracted foreign investors to Indian shares were the stable rupee, steady trend in other Asian markets and good corporate performance in the first quarter of this year.

The Skindia GDR Index P/E was ruling at 16.94 this week compared to 14.83 the previous week. The GDR index premium was quoting at 21.13 per cent for this week as against the previous weeks premium level of 12.35 per cent. On an average, 65 GDRs gained 4.72 per cent during the week, and out of these 29 were gainers in the GDR market while 31 remained unchanged and the rest 5 of them remained unchanged.

GDRs in the auto sector were major gainers during the week rising 13.34 per cent followed by telecom and cement which gained 9.54 per cent and 6.67 per cent respectively. The fertiliser sector was a major loser both in the GDR and the local market.

Among the gainers, GDRs of JCT, BSES and Bajaj Auto recorded the maximum gains in the GDR market. JCT saw a gain of 33.33 per centover its previous weeks close, while GDRs of BSES recorded a rise of 29.72 per cent and Bajaj Auto saw an increase of 28.28 per cent.

Among the losers Bombay Dyeing ranked the higest recording a total fall of 12.50 per cent as compared its previous week’s close. GDRs of CESC and Indo Gulf saw a fall of 11.11 per cent and 9.52 per cent respectively. According to Skindia, GDRs were trading at huge premium in the overseas market over their underlying shares traded in the local market. GDRs of Oriental Hotels was trading at a premium of 270.35 per cent over its underlying shares on July 9.

GDRs of Flex Industries was quoting at a premium of 190.39 per cent while JK Corp traded at a premium of 177.76 per cent. As against this Himachal Futuristic was quoting at a discount of 50.27 per cent over its underlying shares while GDRs of Usha Belton and Ashok Leyland were trading at discounts of 33.36 per cent and 14.62 per cent respectively.

According to Skindia, the auto sector is showing signs of recovery aftergoing through a bad phase in the first quarter in the first quarter of the current financial year. TELCO which was a major loser during the first quarter has recorded a marginal rise of 17.65 per cent right at the start of the second quarter.