SKINDIA INDIAN GDR MONITOR
Volume V No 47	Nov 27-Dec 03, 1998	04-Dec-98

The confusion over IRA bill keeps the markets uncertainty This week the winter session of the parliament started. The future direction of markets depends a lot on what happens in this winter session, and the world is watching with keen interest as to what happens to the IRA bill. since they are of the view, this will determine the BJP governments willingness to continue with the reform process. But in the beginning of the session itself, there was confusion over the introduction of the bill in the parliament. Also, there were differences within the BJP government in respect of this legislation which, if passed, will end the monopoly of LIC and GIC. As the uncertainty continued the markets moved sideways and as result the Skindia GDR Index gained just 5.10 points over the week while BSE Sensex lost 20.62 points. The indices moved in range of 2.87% and 1.20% respectively. As the markets were range bound the average premiums of the 60 GDRs declined marginally from 5.97% on Nov 26 to 5.90% on Dec 03. The spreads of the 37 most actively traded GDRs widened from 9.36% on Nov 26 to 10.11% on Dec 03. The infrastructure sector The government in an effort to kick start the economy, is planning a 7,000 km six lane highway between Srinagar and Kanyakumari, the two ends of the country besides, government has also cleared few other road projects under the built, operate and transfer (BOT) scheme. To attract foreign investment 100% FDI is being allowed in expressway projects, and government is also considering providing subsidies to these projects. Despite all these announcements, the investors are still not interested in investing in the core sector stocks. The GDRs of the cement industry have on an average fallen 7.70% since October while, the underlying shares on average declined 11.26% in the same period. The scene is no different in the steel industry where the GDRs on an average experienced a loss of 4.65% and the shares 17.44%. The only scrip which attracted interest is Guj. Ambuja. Its GDR appreciated 15.56% to $ 5.20 and its share gained 9.65% to Rs 217.10. The GDR of India Cements fell by 30.95% to $ 0.73 and the share 32.16% to Rs 29.85. The GDRs of Ispat Ind remained unchanged at $ 1.25 while its share fell by13.33% to Rs5.20. SAIL GDR depreciated by 9.30% to $ 1.95 and its share declined 21.54% to Rs 5.10.

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.