SKINDIA INDIAN GDR MONITOR Volume VI No 52 Dec 24-Dec 30, 1999 31-Dec-99 Vibrant GDR Markets - Annual Review The year 1999 proved to be quite a turnaround year for the capital markets. After having been depressed for a long time the GDR/ADR as well as the domestic markets witnessed hectic activity this year. Over the year the Skindia GDR Index gained a whooping 89.48% while BSE sensex gained 63.57%. In H1 while the the Skindia GDR index gained only 32%, it gained 43.55% in H2. The GDR markets started the year on a weak footing with the Skindia GDR Index at 595.89, the prolonged political instability kept it in check till the first week of May, when on substantial FII buying it touched 800.77, witnessing a record jump of 28.81% in just one week. But the Kargil conflict shook the markets and the Skindia GDR Index fell down to 668.25 by May 27. The end of the conflict ofcource brought cheers to the markets with the index touching 966.14 in July, the prepoll uncertainty made the markets nervous and the FIIs turned net sellers in Oct. pushing the Skindia GDR Index down to 847.10 on Oct. 28. But with positive expectations from the recovering economy, improved sales and productions of key industries, a stable pro reform government in place & upgradation of outlook on India's rating by international agencies the FIIs made a dramatic turn around and again became net buyers in Nov. The smooth passage of the IRDA bill aiming to open the insurance sector , a monopoly of government till now to private companies acted as a confidence booster proving the ability of the government to carry through further reforms. Finance Minister Yashwant Sinha's prediction of a 6.5% economic growth for FY 1999-00 compared with a 5.8% a year ago further boosted the sentiment. And the markets inspite of Y2K concerns and the year end compulsions have consistently been moving up since then, ending the year on an optimistic note. Over the year Skindia GDR Index gained 533.21 points while the BSE Sensex gained 1945.48 points . During the year a number of Indian companies like Infosys Technologies, Satyam Infoway, ICICI, VSNL and GAIL,successfully floated their ADR/GDR issues while Reliance Petro & Mahindra & Mahindra converted their FCCBs into GDRs. A few companies like Wipro, Silverline etc. are still awaiting their turn while MTNL and IOC had to postpone their issues. Information Technologies seemed to be the flavour of the markets this year and in line with Nasdaq 'Infy' & 'Sify' continued to gallop touching new highs. In the industry wise segregation as expected the DRs from IT sector were the top gainers with an enormous 339.37% gain followed by Pharma sector gaining 142.87% and cable sector appreciating 96.57%. The only two losers were power and hotel sectors losing 4.35% & 4.16% respectively. On the other hand in the underlying shares the top three gainers were cable, pharma, and IT sectors gaining 315.44%, 217.51% & 127.97% respectively. The only loser was the hotel sector depreciating 13.7%. DISCLAIMER : Factual material is obtained from sources believed to be reliable and SkindiaFinance is not responsible for any errors and omissions contained herein. Any recommendation contained in this report may not be suitable for all issuers.