SKINDIA INDIAN GDR MONITOR
Volume V No 44	Nov 06-Nov 12, 1998	13-Nov-98

The buying interest in the GDRs continued from the previous week. The sentiment got a boost after the Securities and Exchange Board of India (SEBI) announced the draft guidelines for share buyback. The Skindia GDR Index touched a fortnightly high of 595.84 on Monday, Nov 9. The Skindia GDR Index gained 37.38 points in the week and the BSE Sensex 167.06 points. During the week, the average spreads of the 37 most actively traded GDRs decreased to 9.10% from 10.48% in the previous week while, the premiums of the 60 GDRs reduced to 3.23% from 6.59%. In the week, the 60 GDRs on an average appreciated 5.19% and the shares gained 8.44%. In GDRs, aluminium sector was the major gainer with a rise of 11.02% followed by auto which moved up by 9.49%. Pharma and telecom sectors were the only losers falling 3.06% and 1.13% respectively. In shares the top gainers were auto and aluminium sectors rising 11.58% and 8.45% whereas, there were no losers. Auto Sector With the industrial output slowing down in the first half of the financial year 1998-99, the auto sector seems to have faced the brunt of it all. As a result of the slow down in the overall economy the credit rating of Telco and Ashok Leyland was cut by CRISIL in September. Ashok Leyland had to resort to 3-day week from Sep 1 in an effort to cut costs. Besides two-wheelers the sales in all other segments of the auto industry showed a decline in the first half of FY 1998-99. Mirroring the gloomy scenario the GDRs of this sector on an average fell 45.38% during this period. Telco recorded the highest fall of 67.18% followed by M & M with 57.27%, Ashok Leyland lost 45.41% and Bajaj Auto 11.66%. The shares on an average declined 41.32%, with Telco losing 61.26%, M & M 50.30%, Ashok Leyland 46.17% and Bajaj Auto 7.55%. In the first 12 days of the second half, the stocks have performed positively, with GDRs of the sector appreciating 13.43% and the shares 15.65% on an average. The Skindia GDR Index moved up 9.60% and the BSE Sensex 7.05%, in the same period. In this period Telco GDR has gained 25.69% to $3.21, Ashok Leyland 20.63% to $1.90, M & M 5.44% to $3.88 and Bajaj Auto 1.94% to $17.08. The price appreciation in the Telco stock has been the

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