SKINDIA INDIAN GDR MONITOR
Volume V No 46	Nov 20-Nov 26, 1998	27-Nov-98

Skindia GDR Index plunges 10% due to political uncertainty As the four states went for polls on Nov 25, 1998 and the opinion and exit polls showing toppling of the ruling BJP government in the states of Delhi and Rajasthan, the political uncertainty took the front seat once again. As a result the Skindia GDR Index fell 61.11 points and the BSE Sensex 139.79 points, over the week. The Skindia GDR Index moved in a wide band of 10.34% during the week. On an average the 60 GDRs fell 6.01% and the shares 7.48%. As the fall more in the underlying shares was more than the GDRs, the average premiums of the 60 GDRs inched upwards to 5.97% from 5.14% in the previous week. While the average spreads of the 37 most actively traded GDRs widened to 9.36% from 8.14% in the last week. In GDRs only cable sector recorded positive returns of 1.23%. After being the top gainer in the previous week the auto sector took a U-turn to become the top loser of this week with a fall of 13.71%. The other top losers were aluminium and telecom declining 12.90% and 8.27%. In shares there were no gainers whereas, the top losers were pharma, auto and aluminium depreciating 17.88%, 11.10% and 8.50% respectively. In a step to further the reform process the government set up a telecom panel to resolve issues between the department of telecommunications (DoT) and Telecom Regulatory Authority of India (TRAI). In addition, the cabinet cleared a proposal with respect to the product patents for the pharma sector and granting of exclusive marketing rights to the pharma companies. On the other hand to help the domestic steel sector government finalised the anti-dumping duty on HRC imports. Despite all this news the scrips of these sectors could not move against the tide of the markets. The Ranbaxy GDR fell 6.86% during the week to $14.25 (cum-bonus) while its premium moved slightly upwards to 23.63% from 23.24%. The GDRs of Core health and Dr. Reddy's remained unchanged at $0.25 and $11.00. The GDRs of Ispat Inds. was unchanged at $1.30 while that of SAIL fell by 2.50% to $1.95 in the week gone by. As the fall registered in their underlying shares was more than the GDRs, 2.59% in the case of Ispat Inds. and 5.50% for SAIL, the discount in Ispat GDR reduced to 2.19% from 4.90% and the premium for SAIL increased to 7.31% from 3.80% from the previous week.

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