SKINDIA INDIAN GDR MONITOR
Volume VI No 24	Jun 11-Jun 17, 1999	18-Jun-99

Sentiment improves as possibility of war reduces This week the market saw an upward trend on the back of persistent buying by Foreign Institutional Investors, and consequent short covering by punters. Activity picked up after rumours that Mr. Clinton was sending his envoy to India to defuse the kargil situation hit the market and turned their sentiment positive. As a result the Skindia GDR Index and the BSE Sensex gained 10.15 points and 68.78 points and the indices oscillated in a wide band of 6.03% and 5.73% respectively. During the week the average spreads of the 39 most actively traded DRs has slightly moved up to 9.35% on June 17 from 9.25% on June 10. The average premiums of the 63 DRs zoomed up to 7.23% on June 17 from 3.91% on June 10. This rise in premium was also due to the depreciation in the value of Indian Rupee against the Green Back. During the week the 63 DRs gained 1.46% whereas the shares declined 1.33%. Auto sector was the top gainer in the DRs gaining 8.26%, the rise in the stock prices has been on the back of rise in the sales of vehicles. Sales of medium and heavy commercial vehicles recorded an increase of 65.30% year on year, to 4,950 units in the month of April. Month of may as well has been good for Telco, with a sales of 3,974 units of medium and heavy commercial vehicles, a rise of 60% year on year, the increase in its LCV sales for May was 4.87% to 3,121 vehicles. During the first quarter of financial year 1999-2000, the auto sector GDRs advanced 30.89% and the shares 19.37%. Bajaj Auto is the only loser with its GDR falling 1.87% to $17.05 and its share 12.84% to Rs 549.10 for the same period. The rise in the sale of commercial vehicles is seen as one of the indicators of the economic revival. Riding on the sentiment the GDRs of Ashok Leyland, L & T, M & M and Telco touched 52-week high at $5.10, $16.50, $7.47 and $5.18 respectively, on Jun 17. With normal monsoon expected for the eleventh year, the sales of tractors are expected to pick up, the main beneficiary of this is going to be M & M, and L & T. L & T being the largest producer of cement in India is also going to benefit due to the rise in demand for the cement. Other top gainers in the GDRs were aluminium and cement sectors gaining 2.95% and 2.73% respectively. The top loser was the Power sector losing 3.79% followed by Textiles and Telecom losing 0.12% and 0.09% respectively. Cables remained unchanged this week. On the other hand in the underlying shares the top gainer was the Steel sector appreciating 7.82% followed by Aluminium and Auto with 4.62% and 3.92% respectively. The top losers were IT, power and fertiliser sectors shedding 6.52%, 5.57%, and 4.83% respectively.

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.