Gdrs Steady, Sbi Back In Limelight

The State Bank of India stock, which has hogged the limelight on the domestic markets, was actively traded on the GDR markets, touching a $ 18.68 level at 1800 hrs IST. Crucially, the Indian GDR markets have remained relatively steady in the new year, with the Skindia GDR index touching 69.54 levels compared with 65.81 on December 31 last year.

The main factor behind the bullish trend for SBI is that the market perceives the FII holding limit in this stock to be raised from the existing 20 per cent to 24 per cent, with a clearer indication expected to come about by the end of the week. The SBI stock had witnessed a premium of 27.01 per cent on January 14 but is set to come down to between 17-20 per cent as the stock has gained sharply yesterday while the GDR has moved up 40 cents yesterday. Marketmen said the SBI stock had been hammered down to `unrealistic' levels prior to the GDR issue; the stock has now bounced back on the local markets.

 

With the local markets recording sharp upswings, the arbitrage opportunity for GDRs has increased. According to Skindia Finance, there have been arbitrage opportunities in Bilt, DCW, Dr Reddy's, Century Textiles, ICICI, Himachal Futuristic, NEPC Micon, SIEL and SPIC, most of which are illiquid stocks.