Skindia At 11-Month High As Floats Gain Around 5%

With the domestic markets witnessing a sharp rally over the past week, the Indian GDR markets are set to witness a sharp upswing

Already the Skindia GDR Index has touched its highest level in the last 11 months, with just 8.55 per cent below its 52-week high of 87.79. The domestic market has also been in the grip of a minor bull run with the Sensex crossing the 4000 mark.

The 64 Indian GDRs increased 5 per cent on an average, while the underlying shares rose 2.53 per cent. Due to the sharp surge in GDR prices during the past week, the Skindia GDR Index premium touched its all-time high of 30.61 per cent.

 

The Skindia GDR Index has, over the past week, moved from 75.02 on June 5 to 80.28 on June 12, up 7.01 per cent.

Over the past month, the Skindia GDR Index has risen by 12.9 per cent, while the BSE Sensex moved up 7.59 per cent in the same period.

According to the Skindia GDR monitor, an analysis of the current bull phase in the market shows that after moving sideways during most of May, the Skindia GDR Index turned northwards and has gained in key blue chips with seven of them touching their 52-week highs.

The 64 Indian GDRs have gained 6.07 per cent on an average with 34 GDRs gaining ground, another 22 remained unchanged and eight lost ground.

The GDRs from the fertiliser sector rose sharply, increasing 18.48 per cent followed by aluminium stocks which moved up 13.21 per cent and pharma GDRs, which rose 7.5 per cent.

In the same period, the Sensex increased by 8.08 per cent and the 64 underlying shares gained 4.48 per cent. In the domestic markets, scrips from the fertiliser sector rose 11.7 per cent, followed by aluminium stocks.

The week witnessed a narrow movement for the Mahindra & Mahindra GDR after the announcement of its results. The GDR gained 2.24 per cent to $13.50 and the share price 2.1 per cent to Rs 364 levels after the company posted a 24.5 per cent rise in net profit to Rs 209.3 crore during 1996-97.

The top gainers in GDRs during the week were Spic, Raymond Woolen and Tata Electric, while the top losers were Videocon International, Bombay Dyeing and CESC.

The top premium amongst GDRs was commanded by Videocon International (115 per cent), Crompton Greaves (61.5 per cent) and Dr Reddys Laboratories (55.8 per cent).

Analysts expect the GDR markets to move in tandem with the domestic markets and even while a substantial correction could come about this week at the local markets, the GDR markets may not react very sharply.