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K.S. Badri Narayanan

INFOSYS Technologies saw its ADR premium widen considerably vis-a-vis the underlying domestic equity at the US markets last week. Infosys ADR now trades at a healthy premium of 71.07 per cent compared with 63.58 per cent during the previous weekend. Though there was no specific reason for the jump in premium, the ADR ended the week slightly better at $65.50 ($64.849) while the underlying stock ended in the negative territory at Rs 3,735.45 (Rs 3,818.90).

The overall sentiment at the US markets was dull. The Dow Jones Industrial Average Index finished the week flat at 10,403.94 (10,427.67) and the tech-focussed Nasdaq at 1845.35 (1851.39). The drop was even sharper at the local bourses, which may explain the gain in the premium of Infy. The Bombay Sensitive Index (Sensex) finished lower at 3469.35 (3516.11) and the broader S&P CNX Nifty at 1129.55 (1138.45).

The other infotech ADRs, however, finished on a weak note. Wipro closed at $37.23 ($38.54), Satyam Computer at $12.50 ($12.55) and Silverline Technologies at $2.15 ($2.22) with premiums remaining range-bound.

The VSNL counter, which witnessed heightened activity on the local bourses, however, did not receive any extra attention on the NYSE. The stock witnessed a lot of block deals on the BSE last week and closed at Rs 186.95 (Rs 177.20). The VSNL ADR closed at $7.85 ($7.14) and now trades at a premium of 2.41 per cent compared to a discount of 2.33 per cent in the previous week. Some of the action in the VSNL stock was attributable to speculation on the initial public offering by Intelsat, in which the company owns a 5.4 per cent stake.

Another ADR that was able to widen its premium sharply was that of ICICI Bank. The ADR now trades at a premium of 28.24 per cent (18.77 per cent). As in the case of Infosys, the ADR closed firm at $6.52 ($6.15) while the underlying stock ended flat at Rs 124 (Rs 123.55).

Despite a gain in the US market, the premium did not see any deviation for ICICI counter. The ADR now trades at a premium of 29.97 per cent (28.93 per cent) while it finished the week on higher note at $8.12 ($7.85). The ICICI stock ended the week on a flat note at Rs 60.95 (Rs 60.50).

Internet counters — Satyam Infoway and rediff.com — closed the week flat at $1.55 ($1.62) and $1.25 ($1.25) respectively.

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