MUMBAI, May 10: The developments on the domestic front are casting a shadow abroad also. Poor performance of blue-chip companies and a possible petroleum price hike kept the overseas markets - where global depository receipts of Indian companies are listed - under pressure in the previous week. As a result, the Skindia GDR index fell for the second consecutive week with 64 GDRs losing 5.18 % on an average as compared to 3.09 % in their underlying shares. The fall in GDRs also led to average premium declining from 21.96 % to 19.63 %.

``Lack of buying interest pushed prices southwards resulting in 12 GDRs touching their 52-week lows during the week,'' said Skindia Finance. Not a single industry gained with scrips from the steel, power and fertiliser sectors faring badly losing 10.65 %, 8.27 % and 7.77 % respectively. However, the smooth passage of the budget without any major changes is likely to improve sentiment in the markets during the coming week, FII sources said.

Century Textiles which reported a 98.66 % fall in its net profit to Rs 2.67 crore led the list of losers. The announcements led to trading volume shooting up over six times to Rs 14.69 crore. Its GDR also took a beating and fell by 15.38 % to $ 55.00. It fell further during the week to close at $ 52, making it among the top losers. Although its GDR was trading at a premium to the share prior to announcement of results, it is currently trading at a discount due to a greater fall in its GDR. Following its bad performance, the company has delayed plans for a second GDR issue of $ 125 million.

Drastic fall in cement price, high costs of shipping and lower price of pulp due to competition from cheaper imports were the main factors contributing to its dismal performance. On announcement of a 1:1 bonus by the company on May 6, its share price shot up 8.29 % to touch its monthly high of Rs 2600. However, the Century scrip came under severe selling pressure on the same day and fell 15.77 % to its monthly low of Rs 2190 following disappointing results to finally close at Rs 2259.

A study for the fiscal 1996-97 shows that movements in the GDR market follow the domestic market on the same day.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.