Financial Daily from THE HINDU group of publications
Monday, Jul 08, 2002
Financial Daily from THE HINDU group of publications Monday, Jul 08, 2002 |
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Markets
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Commentary Columns - ADR Watch Satyam, Dr Reddy's close on firm note K.S. Badri Narayanan
THE US markets finished on a firm note by gaining strongly on Friday last (incidentally the gain was the sharpest in more than nine months). Expectation of higher earnings growth particularly that of computer-related firms such as Intel Corp seemed to have lifted the trading spirit at the US markets. The Dow Jones Industrial Average rose 324.53, or 3.6 per cent on Friday. It closed the week at 9379.50 compared to the previous week close of (9243.26). The tech-focussed Nasdaq Composite Index jumped 68.19, or 4.9 per cent on Friday. However, it ended the week at 1448.36, shedding about one per cent over the previous week's close of 1463.21. Domestic markets also closed the week on better note. While the Bombay Stock Exchange's Sensex finished at 3330.61 (3244.70), the broader NSE's S&P CNX Nifty closed at 1073.80 (1057.80). Almost all the ADRs listed in the US markets finished in positive territory though Wipro closed the week on a negative note at $29.15 ($29.97). However, it now trades at a premium of 1.75 per cent to the underlying stock. During the previous week, it was trading at a discount of 1.17 per cent). On the BSE also, the Wipro stock ended weak at Rs 1,398.42 (Rs 1,482.35). The decision of the Telecom Regulatory Authority of India to cut the monthly rental for limited mobility, wireless in the local loop (WLL) did not give any big push to the telecom counters — MTNL and VSNL, though both finished in positive territory. However, in VSNL's case, it helped in negating the negative sentiment surrounding it following the WorldCom fiasco. VSNL ADR closed at $6.25 ($6.10) while the underlying stock at Rs 151.90 (Rs 147.40). On the other hand, MTNL closed at $5.95 ($5.88). The week's biggest gainers were Satyam Computer and Dr. Reddy's Lab. While Satyam Computer closed at $11.5 ($10.47), DRL finished the week at $21.19 ($19.40). ICICI Bank's premium slipped sharply to 14.38 per cent (24.51 per cent). While the underlying stock gained sharply to Rs 151.50 (Rs 137.40), the ADR finished almost flat at $7.10 ($7) thus explaining the sharp drop in the premium. However, there was not much deviation in the premiums of other counters. Internet ADRs — Rediff.com and Satyam Infoway — continued to witness depress trend.
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