A study on Indian depository receipts (DRs) reveals that foreign fund managers made higher returns in the depositary receipt markets rather than in local markets.
Indian DRs markets outperformed local markets over the last month till June 19, 2003, with the Instanex Skindia DR Index (ISDI) advancing 16.71 per cent to 570.13 and BSE Sensex gaining 12.79 per cent to 3,454.60.
This led to a 3.06 per cent increase in the ISDI premium to local from 8.09 per cent to 11.15%. The study revealed that Indian depositary receipts are benefiting from the lack of fresh investment opportunities for fund managers.
In the US, the amount raised in IPOs this year has fallen 80 per cent to $6.3 billion to the lowest level since 1979. Instanex says that that the US Fed is likely to lower short-term rates on June 24, 2003.
This will lead to rates being at their lowest level since the 1950
