Financial Daily from THE HINDU group of publications
Monday, Jun 03, 2002
Financial Daily from THE HINDU group of publications Monday, Jun 03, 2002 |
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Markets
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Commentary Columns - ADR Watch ICICI Bank on song K.S. Badri Narayanan
MARKETS, both the US and domestic, witnessed weak sentiment during the week gone by on threat perceptions. While the warning from the FBI on the possible terrorist strike affected the US markets, the growing fear of war between India and Pakistan dumped the domestic markets. On the back of these perceptions, in the US, the Dow Jones Industrial Average finished the week lower at 9925.25 against the previous week's close of 10104.26. The tech-savvy Nasdaq closed at 1615.73 (1661.49). In the domestic markets, the Bombay Stock Exchange Sensex closed weak at 3125.73 (3225.62) and the National Stock Exchange's S&P CNX Nifty at 1028.80 (1067). Except ICICI Bank and Satyam Infoway, no other Indian ADRs closed in positive territory. In fact, ICICI Bank has been witnessing a strong rally in the last month, closing the week at $7.40 against the previous week's close of $6.80. During May, the ICICI Bank ADR gained a whopping 46.53 per cent. Premium also widened in the counter and the ADR now trades a premium of 30.13 per cent (25.16 per cent). On the BSE, the stock gained close to 24 per cent in May at Rs 139.45. The Bank Chairman, Mr K. V. Kamath's, announcement (earlier in the month) that he expected loans to expand as much as 20 per cent in the current financial year could have acted as a catalyst. Besides, following the merger of ICICI, ICICI Bank has entered the major Indian indices — Sensex and Nifty. This could have bolstered sentiment in the counter. The reported news that Satyam Infoway acquired the retail customers of Wipro Ltd's Internet service, NetKracker, appeared to have evoked positive sentiment for Sify. It ended the week at $1.36 ($1.33). The acquisition may help parent Satyam Computer's plan to sell all or part of its 52.5 per cent stake in Sify. Despite a tug of war between the Government and the Tatas, the new owner of recently-divested VSNL, over the latter's plans to invest Rs 1,200 crore from VSNL reserves in the group company Tata Teleservices, the VSNL stock ended the week in the positive territory at Rs 186.35 (Rs 183.65). However, the ADR took a divergent path to end in negative territory at $7.31 ($7.60). The VSNL ADR now trades at a discount of 3.8 per cent against the previous weekend premium of 1.38 per cent. Premiums for other ADRs also dipped.
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