The initial euphoria over the MTNL GDR issue has subsided and the GDR markets once again succumbed to the bearish sentiment prevailing at the markets.
The Skindia GDR index commenced the week on a poor note, losing 2.68 per cent to 862.36 and is at present only 3.64 per cent above its 52-week low of 774.40 (December 16, 1996). Sixty-five GDRs fell 4.59 per cent on an average compared with a fall of 3.57 per cent in their underlying shares.
GDRs from the steel, cement and automobile sectors have mirrored the weakening trend losing 11.76 per cent, 11.43 per cent and 9.63 per cent respectively.
Of the 65 GDRs, 40 were trading at their 52-week lows on December 11.
Amongst them include pivotals like BSES ($13.5), Gujarat Ambuja ($6.75) Hindalco ($19.5), Larsen and Toubro ($8.75) and Telco ($7.38).
With the meltdown of the Asian markets, a fluid political scenario and the depreciation in the rupee, the selling pressure at the local markets has increased. This has affected the GDR markets also.
Between October 12 and December 11, the Skindia GDR Index lost 29.38 per cent compared with a fall of 10.67 per cent in the same period last year. The average daily erosion in 63 GDRs (VSNL and MTNL have not been considered) has been 0.79 per cent with only six showing an average daily appreciation against 12 GDRS in the same period last year. Dr Reddy's lab (0.24 per cent), Ranbaxy (0.20 per cent) and Grasim (0.18 per cent) experienced the highest appreciation, while Indo Rama (down by 1.99 per cent), JCT (down by 1.83 per cent) and SAIL (down by 1.70 per cent) showed the maximum slide.
The ITC stock continues to be the most volatile stock at the local markets.
This trend has been reflected at the GDR markets also. The stock touched a 52-week high of Rs 645 on December 4 during the intra-day trading on the BSE, topping the turnover list on the Bombay Stock Exchange and National Stock Exchange.
However, last week, the scrip witnessed a slide, crashing 8.8 per cent on the BSE and NSE, where the scrip touched its circuit filter level on the lower end. Its GDR and share price finally closed at a loss of 8.33 per cent to $16.50 and 10.83 per cent to Rs 561.75 respectively.
The Skindia GDR premium declined sharply last week from an average 18.24 per cent to 14.80 per cent, down by 18.86 per cent. Over the week there were only five GDRs which gained, 28 remained unchanged while 32 lost ground. In the underlying shares segment, 13 gained, one was unchanged while 51 GDRs lost ground.
The top gainers amongst the GDRs were CESC, Finolex and Dr Reddy's. The top losers were SAIL, Gujarat Ambuja and Crompton Greaves.
The GDR markets are not likely to witness hectic trading activity in the coming two months, with the local markets expected to witness bearish trends.
The uncertain political scenario, the weakening of the Asian markets has further affected the timetable for the Indian corporates which were planning to launch GDRs.
The IOC GDR is set to be launched in February, followed by CONCOR, while the Gail GDR awaits a relaunch only when the markets improve substantially.
