SKINDIA INDIAN GDR MONITOR
Volume V No 50	Dec 18-Dec 23, 1998	24-Dec-98

Christmas brings joy to the bourses The end of air strikes by the United States of America and the United Kingdom against Iraq pushed up the Skindia GDR Index by 34.00 points or 6.34% on Monday Dec 21, and the BSE Sensex gained 98.18 points or 3.41% on the same day. As the week progressed the activity in the markets went flat on the back of holiday mood. As a result of Monday's gain the Skindia GDR Index closed the week with a gain of 41.06 points and the BSE Sensex 98.06 points. With the higher rise in the GDR markets the average premium of the 60 GDRs increased to 7.95% on Dec 23, from 7.12% on Dec 18, while the average spreads of the 37 most actively traded GDRs narrowed marginally to 9.37% on Dec 23 from 9.47% on Dec 18. The annual review of GDRs Year 1998 was a very eventful year. The year started with an uncertain outlook on the back of South East Asian crisis followed by general elections resulting in a new government in the parliament. As the BJP government took office at the centre an up-trend was witnessed in the markets which later collapsed as the government was constantly under pressure of Ms. Jaya's, the leader of AIADMK party, threats of pulling down the government. The markets took a knock when India conducted nuclear tests on May 11 after a gap of 24 years, thus inviting economic sanctions form the US and Japanese governments. The Skindia GDR Index registered a fall of 13.33% in the week May 22 to May 28, the greatest ever fall in a week by the index, since S&P downgraded the out look towards India from stable to negative. As the South East Asia was at the brink of second melt-down by the month of June the Skindia GDR Index declined 37.13% till June 30. In August the Index declined by 12.56% touching all time low of 481.61 on Aug 18, resulting from the devaluation of Russian currency Rouble. As the law ministry cleared the proposal of buy back of shares in September the Index appreciated 20.06%. In October, the news of problems in UTI's flagship scheme US 64 led to a crash in the bourses resulting in a fall of 7.65% in the Skindia GDR Index. The markets remained relatively calm in November with the index losing 1.76% in the month. In December markets showed some positive movements arising out of the expectations of important bills such as IRA bill, Patents bill Companies bill etc. going through in the winter session. By the end of the session all these bills were deferred till the budget session the good thing was that these were introduced in the Parliament and have in principle support of the Congress, the main opposition party. Hence, there's high likely hood of these passing through the house in the next session. Till Dec 23, the Skindia GDR Index gained 8.76% in the month.

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