The weak sentiment at the local markets on account of the political uncertainty had its impact on the overseas trading segment too during the week.
The Skindia GDR Index moved around 2.34 per cent compared with 7.46 per cent in the preceding week.
By the end of last week, the stock markets were distinctly nervous and the prices of key GDR offerings dipped by 2-3 per cent on Friday last. The foreign investors preferred not to sell their holdings and on that day, of the 64 GDRs, prices of 38 remained unchanged, 20 lost ground, while only six gained by late Friday evening.
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Over the week, the 64 GDRs declined 0.79 per cent on an average compared with a fall of 1.04 per cent in their underlying shares. This led to average premiums descending from 20.43 per cent to 19.31 per cent.
A Skindia Finance source said: The fall of the Deve Gowda government (coupled with uncertainty over who would form the new government) would make the foreign investors apprehensive of investing in India in the coming weeks. However, the only ray of hope in reviving interest and improving the sentiment is the passing of the pro-market budget in parliament during the special session on April 21-23. The festering political sores would see affect the launch of future GDR issues. The Gas Authority of India and Indian Oil Corporation issues were expected to be launched in the coming months.
According to a study carried out by Skindia Finance, a market shift has been seen with preference of fund managers towards the blue-chip GDRs in the fiscal 1996-97. Only 10 GDRs have shown positive returns (28.6 per cent on an average), all of them being blue-chip stocks. ITC showed the highest return of 76.67 per cent followed by BSES with 33.33 per cent and Hindalco with 32.89 per cent.
Of these 10 issues, 9 are trading above their issue price with Arvind Mills being the only exception. The remaining 52 GDRs have experienced average negative returns of 40.25 per cent followed by Ballarpur Industries with 69.23 per cent and SIV Industries with 68.75 per cent.
The industries which performed the worst were fertiliser scrips showing an average negative return of 45.49 per cent followed by textile scrips of 44.62 per cent and cable stocks dipping 43.05 per cent. During the week, there were only 12 GDRs which gained, 27 remained unchanged while there were 25 losers.
The top gainers included Core Parenterals, United Phosphorous and Gujarat Ambuja. The top losers were NEPC Micon, Sanghi Polyester and CESC. The Skindia GDR Index has dipped from 69 on April 3 to 67.86 on April 11, dipping by 3.65 per cent.
Two Indian stocks - Infosys Technologies and cellular giant Bharati Televentures - are seeking to adopt the ADR route to raise more funds.The Infosys ADR could be of a $25-50 million size and may turn out to be the first Indian company to issue ADRs after the BPL Cellular debacle.