Dull Trading Lifts Spreads To 18 Per Cent Levels

The Indian GDR market sentiment for the second consecutive week remained poor as corporates posted disappointing financial results. The Skindia GDR Index moved in a narrow range, losing ground for the third week.

The 64 Indian GDRs lost ground by 1.04 per cent on an average with 17 GDRs touching their 52-week lows.

A lack of trading interest amongst marketmen abroad resulted in the average spreads of the 64 GDR offerings increasing from 16.24 per cent to 18.08 per cent.

While the trading interest has been sharp in B1 stocks at the local markets, the fund managers abroad seem to be losing interest in the GDR offerings of these companies.

 

Some of the GDRs are trading at new 52-week lows, the Skindia GDR monitor said.

The GDR prices of Core Parenteral ($0.75), Flex Industries ($4), Hindustan Devlp ($0.35), Indo-Rama ($6), JK Corp ($1), Jain Irrigation ($1), JCT Ltd ($2.66), NEPC Micon ($0.30), Nippon Denro Ispat ($4), SIEL ($1.25), SIV Industries ($0.75), Sanghi Polyester ($1.25) and Tube Investments ($1.50) fell to their 52-week lows during the past week.

In the past six months, these GDRs have experienced average negative returns of 58.31 per cent although the Skindia GDR Index gained 18.37 per cent. The lack of trading interest in these stocks can be seen from the wide spreads between the bid and offers.

The average spreads for these GDRs is 49.46 per cent compared with an average 17.98 per cent for the 64 GDRs, the monitor stated.

The Skindia GDR moved in a narrow range from 71.01 on May 8 to 70.81 on May 15.

The GDR premium moved up marginally as the stock markets weakened, to touch 20.27 per cent on May 15 against 19.24 per cent on May 8.

During the past week there were 18 GDRs which gained, 27 remained unchanged and 19 lost ground.

In the underlying shares segment, there were 24 gainers, 32 lost ground while 9 remained unchanged.

In depository related news at the international markets, the trading at the US exchange (NYSE, Nasdaq and Amex) totalled 2.70 billion depository receipts valued at $101.5 billion, representing a 20 per cent increase in dollar volumes compared with the first quarter of 1996.

The Bajaj Auto company experienced 5.37 per cent increase in its net profit to Rs 440.57 crore.

Even as the financial results came in, along side the reports of a proposed bonus issue, the Bajaj Auto GDR gained 5.69 per cent to $32.50 and the underlying share was up 7.71 per cent to Rs 915 levels at the Bombay Stock Exchange.

The traded turnover in the stock at the local markets also moved up four times to Rs 33.1 crore.

ModiLuft has put off the proposal for launching its $60 million GDR.