Concor Approval Buoys Sentiment
The governments decision to go ahead with the Container Corporation of India (Concor) issue has lifted the sagging sentiment in the capital markets.
According to statistics provided by Skindia Finance, the onset of the Chinese New year saw indices pierce previous bottoms to touch new lows last week.
The Skindia GDR index closed on January 29 at 780.66 against the previous close of 795.54. With a strong rupee, an unstable government and redemption pressures, FIIs continued to pull out their holdings from the GDR and domestic markets.
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The green signal has been given by the core group following a positive feedback received from a pre-marketing team. About 15 million shares will be issued to investors through the GDR offerings.
The Skindia GDR index was just 2.17 per cent above its 52-week low of 765.34 on January 12. The top gainers were GNFC, SPIC and Crompton Greaves, while the top losers were Indal, Bombay Dyeing and Indo Gulf.
The GNFC stock closed at $2 50 against $2 00 while SPIC closed at $4 25 against the previous close of $3 50. Crompton Greaves stock lost 14.29 per cent of its value when it closed at $1.75. Indal lost 27.27 per cent closing at $2 00. Bombay Dyeing lost 20 per cent over the previous close of $ 3.
About 31 of the total 65 GDRs fell 1.89 per cent compared to their underlying shares.
GDR premiums which declined by 12.94 per cent in the first two weeks of January rebounded and increased by 8.53 per cent in the last fortnight.
A study of the GDR trading frequency indicates a decline in 1997 as compared to 1996. In 1997, SBI was among the most frequently traded GDRs, trading on 77.01 per cent of the days. This was followed by Bajaj Auto and Hindalco. Their trading frequency, however, declined in 1997 by 3.98 per cent to 74.33 per cent and 8.84 per cent to 73.56 per cent respectively, compared to the previous year.
The five GDRs which were least traded included Oriental Hotels, Jain Irrigation, Ballarpur Industries (2.68 per cent), Ispat Industries (3.45 per cent) and Kesoram Industries (3.45 per cent).
Further, this study also showed that in the second half of 1996-97, following the Asian Stock market crash and lack of Asian paper appetite, trading frequency of 33 of the 64 GDRs dropped. GDRs from fertilisers were the most frequently traded with trading frequency increasing by 79.92 per cent. Least traded GDRs were from the pharma, cable and cement sector.