SKINDIA INDIAN GDR MONITOR
Volume VI No 22	May 28-Jun 03, 1999	04-Jun-99

Pakistan's offer to enter into talks, the Srinagar airport being opened to civilians and Vajpayee's proposal to meet the Pakistan's foreign minister were taken as positive development by the market. Hence, the Skindia GDR Index and the BSE Sensex gained 93.19 points and 114.43 points respectively. The recovery was aided, largely on hectic short covering by punters, while institutions bought into index -weighted cyclicals. But, the trading volumes remained dull and featureless, the turnover of the underlying shares on the BSE fell by 6.85% to Rs 4,348.98 cr for the week ended Jun 03. During the week the average spreads of the 39 most actively traded DRs were 8.90% on May 27 as compared to 8.99% on June 03. As the GDRs ended the week in positive territory the average premiums of the 63 DRs zoomed up to 6.04% on June 03, from 4.58% on May 27. In the week the 63 DRs on an average gained 5.37% and the shares 3.86%. Auto sector was the top gainer in the DRs with a rise of 17.53% followed by Fertiliser appreciating 8.87%. The top losers were steel and IT sectors both depreciating 3.41% followed by pharma shedding 0.26%. Cables remained unchanged this week. On the other hand in the underlying shares the highest gainer were textiles gaining 9.31% as the Union Commerce Ministry has chosen it as one of the sectors for providing a special thrust to export this year. The second top gainer was the cement sector with a rise of 8.05% . The major losers were the steel and aluminium sector losing 4.84% and 1.65% respectively followed by cables with 0.18%. This week saw two GDRs touching the 52-week highs with Reliance touching a high of $10.13 on June 03, while Ashok Leyland reaching $4.35 as on June 03. Pharma sector - not feeling too well After giving a great performance the pharma stocks stopped for a breather this quarter. The pharma GDRs and shares which recorded a gain of 58.49% and 80.15% on an average during the previous quarter ending Mar 31, 1999, turned negative in the first two months of this quarter. The Skindia GDR Pharma Index gave a return of -7.34% underperfoming both the Skindia GDR Index and the BSE Sensex, which gave returns of 16.26% and 7.88% in the same period. The major loser in the GDRs was Core Health which declined by 30.00% in the two month period to US $0.35 followed by Wockhardt falling 22.58% to $6.00. Only Dr. Reddy's provided positive return of 8.33% to $19.50 but it is phenomenally low from 63.64% provided in the previous quarter. Despite, not so good performance the undertone in the sector remains strong. The average premiums of the sector has moved up from 3.64% in the previous quarter to 5.72% in this. Another significance is that in the previous quarter only Ranbaxy GDR was quoting at the premium but this quarter all the pharma GDRs are quoting at a premium.

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.