Bom Dyeing, Arvind See Trading Interest
Even while the Indian GDR markets moved in a narrow range, there has been a change in trading interest in key textile GDRs over the past week.
According to data available from Skindia Finance, both Arvind Mills and Bombay Dyeing generated substantial trading interest on the domestic and international bourses. The closing prices of the GDRs changed on 61.7 per cent and 50 per cent of the days respectively in 1997 compared to 35.7 per cent and 19.05 per cent of the days in the fourth quarter of 1996.
The higher trading frequency resulted in the spreads between the bid and the offer prices of the GDRs of these two companies narrowing from 12.82 per cent and 26.76 per cent in the fourth quarter of 1996 to 10.5 per cent and 18.84 per cent respectively. On the BSE, the average daily turnover of Arvind Mills shot up 173.47 per cent to Rs 1.34 per cent in 1997 from Rs 0.49 crore (fourth quarter of 1996) and Bombay Dyeing 264.29 per cent from Rs 0.28 crore to Rs 1.02 crore in the same period.
Despite the underlying share price of Arvind Mills outperforming the GDR price in 1997, the average premium of the GDR has moved up 2.42 per cent to 31.77 per cent against 31.02 per cent in Q4 1996. The average premium for the Bombay Dyeing GDR has zoomed up 315.52 per cent from 3.01 per cent (Q4 1996) to 12.50 per cent (1997). The GDR and the underlying share have appreciated 30.43 per cent (to $ 4.50) and 20.47 per cent (to Rs 133) in 1997.
The trading interest at the GDR markets has slowed down over the past week as the Union Budget draws closer. The foreign investors have preferred to waituntil some market friendly announcements are made in the Budget.
The Skindia GDR Index moved in a tight band of 1.83 per cent due to the 41 GDRs remaining unchanged on an average during the week. The weekly change of 0.34 per cent is in sharp contrast to trends witnessed in previous months when the Index movement has been between 3-5 per cent.
During the week, the 63 GDRs gained 0.29 per cent on an average against a fall of 1.78 per cent in the underlying shares.