Financial Daily from THE HINDU group of publications
Monday, Mar 18, 2002
Financial Daily from THE HINDU group of publications Monday, Mar 18, 2002 |
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Markets
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Commentary Corporate - Overseas Investments Premium narrows for most ADRs K.S. Badri Narayanan
INDIAN ADRs ended on a rather weak note last week on the US markets which displayed mixed trends. While the Dow Jones Industrial Average finished the week on a positive note at 10,607.23 against the previous week close of 10,572.49, the tech-focussed Nasdaq closed weak at 1,868.30 (1,929.67). However, Indian stock markets ended the week in the negative territory, mostly plagued by political tensions due to the Ayodhya controversy. The Bombay Stock Exchange Sensitive Index finished at 3617.38 (3656.77) and the broader S&P CNX Nifty closed at 1169.75 (1187.65). Besides, the week saw most ADRs shedding their premiums considerably. Infosys now trades at a reduced premium of 57.13 per cent compared to 67.19 per cent of the previous week. The downgrading of the Montreal-based Nortel Networks by the Moody's seems to have affected the sentiment for infotech stocks. Infosys and Wirpo suffered the most, as these companies have close links with Nortel. Besides, the offloading of over 2 per cent of Mr N.R. Narayana Murthy's (Chief Mentor) holdings in Infosys dampened the sentiment for the counter. Infosys closed the week at $64.60 ($72.50) while Wipro finished at $39.84 ($41.67). However, there was only a marginal decline in Wipro premium, which now trades at a premium of 10.19 per cent (10.33 per cent). Silverline Technologies, was, however able to end the week better at $2.50 ($2.39), though its premium declined to 0.24 per cent (4.16 per cent). Only MTNL and VSNL ADRs ended on a positive note. With the Union Government displaying its determination to move on with the disinvestment process (by inviting bids for BPCL and HPCL), these PSU ADRs enjoyed the market attention. MTNL closed the week at $6.25 ($5.90) and VSNL at $7.05 ($6.98). MTNL was also able to reduce its discount to 1.75 per cent (discount of 3.17 per cent) though the discount for VSNL widened marginally to 3.26 per cent (2.49 per cent). All the other ADRs ended the week in the negative territory.
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