MUMBAI, January 17: Expectations for a bright new year seem to be a distant dream as bad tidings continued to plague the bourses. Repurcussions of downslide in the major world indices were also felt in the Indian GDR (global depository receipt) market, as the Skindia GDR index which had slumped by 7.04 per cent to 808.78 on January 9 touched its 52-week low of 756.34 on January 12, and finally dropped by 10.51 per cent to 778.56 as against previous week's close of 870.04.Pivotals like Bajaj Auto ($ 17), Telco ($ 6.63), Hindalco ($ 16) and Mahindra and Mahindra ($ 8.50) were among the 34 GDRs trading at their 52-week lows on stock exchanges in London and Luxemburg.
With the rupee weakening to an all-time low against the American greenback, Peregrine's move towards liquidation and Moody's decision to review the Indian sovereign rating, GDRs and their underlying shares were hit by massive erosion. On an average, 65 GDRs and their shares lost 5.72 per cent and 7.56 per cent respectively during the
week.
Bears hammered GDRs from aluminium, auto and cement sectors which lost 19.62 per cent, 18.61 per cent and 11.29 per cent respectively. Currently 80 per cent GDRs are trading at a discount to their issue price. ITC, Mahindra and Mahindra, Hindalco, EI Hotels and Ranbaxy Labs were among the 12 GDRs trading at highest premium to their issue prices.
According to a study report prepared by Skindia Finance, in 1997, trading volumes for depository receipts perked up by 23 per cent to 15 billion shares with an associated value of $ 555 billion, a 53 per cent increase over the last year. These DRs were traded on the NYSE, NASDAQ, AMEX, OTC and European markets. Companies in the UK, Mexico and the Netherlands were the most actively traded.
Non-US companies from 46 countries raised $ 19 billion through 145 depository receipt offerings in the US and European public and private markets. Banking, telecom and oil gas were the leading sectors raising over $ 10 billion. This year also saw first time issuers from
Bahrain, Jordan, Kazakhistan, Latvia, Lithuania and Slovenia.
Of $ 19 billion raised during the year, 10 countries from Asia and Australia raised $ 4.5 billion in depository receipt offerings. Privatisation of state enterprises continued as governments from 13 countries raised $ 6 billion through DRs. Among the notable privatisations were India's MTNL and VSNL GDR programme, the latter also being the largest programme listed on the London Stock Exchange. Skindia GDR index P/E declined sharply by 8.38 per cent to 16.78.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
