SKINDIA INDIAN GDR MONITOR
Volume VI No 25	Jun 18-Jun 24, 1999	25-Jun-99

Investors remain on sidelines on increasing worries on Kargil After a positive movement in the past three consecutive weeks the capital markets lost their direction this week. The Skindia GDR Index gained marginally 0.17 points while the BSE Sensex ended the week with a loss of 5.52 points moving in a band of 5.24% and 3.53% respectively. During the week both the bulls & the bears participated taking turns. Reports that the G-8 nations have condemned the breach by Pakistan of its Line Of Control and called for an end to the fighting and news that there has been renewed vigour in buying interest into technology stocks on NASDAQ gave a ray of hope with the Skindia GDR Index touching a 52-week high of 821.00 on June 21. But towards the end of the week the trading sentiment was subdued, as the foreign Institutional Investors had also turned somewhat cautious because of the continued escalation of the situation in the Kargil sector. Their assessment was based on the erratic flow of Foreign funds in the past few days. In other words they have become net sellers on a couple of days. As the GDR markets remained ahead of the domestic market the average premiums increased to 7.60% on June 24 from 7.23% on June 17, other reason for higher premiums is the 17 paise depreciation of Indian Rupee against the US Dollar. The average spreads of the 39 most actively traded DRs moved down to 8.72% on June 24 from 9.35% on June 17. During the week the 63 DRs on an average gained 2.76% and the shares 2.85%. In the industry wise breakup the GDRs of the steel sector were the top gainers appreciating 19.09% followed by fertiliser and cable sector gaining 7.09% and 6.44% respectively. The top losers were telecom sector depreciating 3.81% followed by textiles and power sector losing 3.00% and 0.99% respectively. In the underlying shares too the top gainer was the fertiliser sector appreciating 13.46% followed by IT and cable sector gaining 12.82% and 10.10% respectively. The top losers were the cement, aluminium and telecom sector each shedding 5.52% ,4.19%, 1.02% respectively. Gain in the fertiliser sector is due to the expectation of normal monsoon, leading to an increased demand of the fertilisers from the agricultural sector. While the rise in the steel sector due to the hike in the demand of steel and the increase in the floor price of hot rolled coils by Rs 500.00 per tonne.

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