The Hindu Business Line : MTNL witnesses unusual activity

THE US markets seemed to have pushed the negative news, including accounting frauds from corporate America, to the backburner and indulged in bargain buying - helping the markets to finish on a firm note during the week gone by.

Last week, all three indexes rose in the same week for the first time since May. The Dow Jones Industrial Average added 5.2 per cent at 8745.45 over the previous week close of 8313.13. The Standard & Poor's 500 Index rose 5.1 per cent. For both, it was the biggest weekly advance since September. The Nasdaq Composite Index rose 4.7 per cent, the first weekly gain since June 28. Nasdaq finished the week at 1306.12 (1247.92).

However, domestic markets were plagued by the petrol pump scandal and the reported withdrawal from the Indian market by a leading FII. The Bombay Stock Exchange finished the week lower at 2976.34 (2985.01) and the National Stock Exchange's S&P CNX Nifty at 961.95 (954.75).

Among the Indian ADRs, MTNL was among the worth-mentioning list as the counter witnessed some wild swings, resulting in a huge jump in the premium. Though the ADR now trades at a previous weekend premium levels to the underlying stock, the premium shot up to as high as 23.71 per cent during the week, mainly due to the sudden spurt in the ADR price. However, the counter retracted the next day to trade around the previous levels. After scaling an intra-week high of $6.45, the MTNL ADR closed the week at $5.25 ($5.20) with a premium (discount) of negative 1.89 per cent (1.48 per cent). However, there was no such fluctuation on the BSE.

All the tech majors witnessed some interesting activity. While Wipro and Satyam Computer finished the week on a firm note, Infosys Technologies and Silverline Technologies closed the week in negative territory. In fact, Silverline recorded its new 52-week low at $.77 during the week.

For Satyam, a couple of factors flared up interest. FII major Warburg Pincus picked up 5.3 per cent stake in the company. Besides, it was reported that Reliance Infocom was interested in picking up Satyam's 52.5 per cent stake in its subsidiary, Satyam Infoway. And another factor that stepped up interest in the counter was it bagging an offshore order from Saint Gobain Abrasives.

During the week, the Chief Marketing Officer of Infosys, Mr Sanjay Joshi, quit to join the other IT major Wipro. However, Infosys claimed that his quitting would not have any impact on the company's operation. Despite this, Infosys finished weak at $52.21 ($53.41). On the other hand, Wipro finished higher at $24.90 ($22.92).

VSNL also announced that it was unsure of collecting its receivables from the beleaguered WorldCom. VSNL estimated its exposure to WorldCom at between Rs 294 crore and Rs 441 crore. However, the company's Managing Director, Mr S.K. Gupta, said the company was not alarmed by the dues. This statement seemed to have helped VSNL remain flat.

In the meanwhile, WorldCom came out with new disclosure that it found an additional $3.3 billion in accounting irregularities. VSNL closed the week at $5.03 ($5.10).

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