SKINDIA INDIAN GDR MONITOR
Volume VI No 45	Nov 05-Nov 11, 1999	12-Nov-99

Festivity Prevails - Skindia GDR Index up 4.38% Diwali this year brought cheers to the markets and the GDR as well as the domestic bourses continued to surge forward this week too. Continued buying by the FIIs in the domestic markets boosted sentiment and the Skindia GDR index gained 4.38% while the BSE Sensex gained 3.42%. As per the figures released by SEBI for November, FIIs have been net buyers to the tune of US$168.6 mil upto Nov 11. Although the movement in the GDR markets was unidirectional through out the week, the domestic markets took a breather on 9th Nov loosing 28.58 out of 164.62 points it had gained in the earlier 2 days. But subsequently it regained 17.4 points before the week ended. Over the week the Skindia GDR Index & BSE sensex oscillated in a narrow band of 3.62% & 1.13% gaining 38.80 & 153.44 points respectively. During the week the average premiums of the 66 DRs fell down to 13.71% on Nov.11 from 9.46% on Nov 4 while the spreads between the 41 most actively traded DRs remained unchanged at 8.03% on Nov 11. Over the week the 66 DRs on an average lost 0.74% while the underlying shares gained 2.50%. In DRs the top gainer was the IT sector rising 23.30% followed by telecom 6.70% & aluminum sectors 4.22%. The top three losers were fertiliser sector depreciating 7.68%, steel sector 7.18% & textile sector 5.14%. On the other hand in the underlying shares the top gainer was the cable sector gaining 14.13% followed by cement & aluminum sectors gaining 9.53% & 9.48% respectively. The only two losers were steel & textile sectors losing 5.83% & 2.05% respectively. MTNL GDR Issue Deferred :For want of better price Mahanagar Telephone Nigam Ltd deferred until January next year its proposed second GDR issue, as the current sentiment in the GDR market seems to be less than ideal. Through this disinvestment of 19 million shares, constituting 3% of MTNL equity, government expects to raise $100 mil., but at the prevailing prices it could not have mopped up more than $80 mil. Due to Y2K fears presently most of the investors are closing their books ahead of the year end and are not making fresh investments. MTNL GDRs issued in 1997 are currently quoting at a discount over its issue price. Government's stake after the proposed issue would come down to a little over 51% from 56.25%. Other major shareholders at the moment are FIIs & NRIs 17.61%, UTI 7.02% & insurance companies & mutual funds 5.47%, whereas GDR holders account for 11.11%. Meanwhile as per the media reports a European telecom major is interested in a minority stake in MTNL and is willing to cough up Rs.250-300 per share. This could lead to a strategic partnership between the two in telephony project.

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.