Financial Daily from THE HINDU group of publications
Monday, Dec 16, 2002
Financial Daily from THE HINDU group of publications Monday, Dec 16, 2002 |
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Markets
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Commentary Columns - ADR Watch ICICI Bank, DRL post strong gains K.S. Badri Narayanan
APPREHENSIONS over US corporates' profitability seemed to have kept a tab on the progress of the US markets. With some major corporates slated to announce their financial performance in the coming week, the mood turned cautious, pushing down major indices. The Dow Jones Industrial Average fell 2.4 per cent during last week to 8433.85 while the tech-focussed Nasdaq crashed 4.19 per cent to 1362.63 and the S&P-500 dropped 2.49 per cent to 889.50. The mood on the Indian bourses was, however, upbeat, as investors seemed to have reposed faith in the reform process as a couple of exit polls predicted a BJP win in Gujarat. (BJP did eventually win the election, which was declared on Sunday). The Bombay Stock Exchange (BSE) Sensex jumped 1.1 per cent to 3342.97, near its five-month high. The broader NSE's S&P CNX Nifty closed higher at 1086.20 against the previous week close of 1069.80. Among the Indian ADRs, ICICI Bank and Dr. Reddy's Lab posted strong gains. The ICICI Bank counter closed at $7 ($5.79) and its premium to the underlying stock jumped 12.85 per cent against the last weekend premium of 3.53 per cent. The counter was upbeat ever since the Government passed the Securitisation Bill, which allows the lenders to sell the secured assets of defaulters to reduce its bad loans. The counter got a further boost after the Delhi High Court rejected a petition by Mardia Chemicals, which owes about Rs 145 crore to ICICI Bank, against the sale of its properties. HDFC Bank, which missed the recent rally following the passage of the Securitisation Bill (thanks to its low NPA), finished on a flat note at $12.7 ($12.67). Dr. Reddy's Laboratories finished at $16.63 ($15.93) ahead of crucial verdict by US District Court on Pfizer's compliant in the amlodipine maleate case. The court will pronounce its verdict on December 17. Infotech majors — Infosys Technologies, Wipro and Satyam Computer — all seemed to have succumbed to selling pressure that plagued Nasdaq. These counters, on the other hand, finished firm on the BSE. Infosys, in particular, gained sharply on the BSE, as investors seemed to have piled up the stock following the company's announcement on converting equity shares into ADS. Telecom counters, MTNL and VSNL, also finished on a firm note. VSNL gained sharply to $4.34 ($4.17) on expectation that the company is likely to launch its national long distance service. MTNL, on the other hand, closed marginally higher at $4.42 ($4.40) after witnessing some volatile action following the Communication Minister, Mr Pramod Mahajan's assertions that the company would not be privatised.
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