Financial Daily from THE HINDU group of publications
Monday, Nov 04, 2002
Financial Daily from THE HINDU group of publications Monday, Nov 04, 2002 |
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Markets
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Commentary Columns - ADR Watch Infosys maintains healthy premium K.S. Badri Narayanan
DESPITE disappointing reports on economic data such as gross domestic product, employment and manufacturing, the US markets ended the last week on firm note. Expectation that the central bank will lower interest rates in its next week meeting could have shored up investors confidence. As a result, the Dow Jones Industrial Average gained 0.9 per cent to 8517.64 over the previous week close of 8443.99; the broader S&P-500 gained 0.4 per cent to 900.96 (897.65) and the tech-focussed Nasdaq edged up 2.21 per cent to 1360.70 (1331.13). For the Indian bourses the index heavyweight Reliance acted as a catalyst; besides strong Q2 performance, the company declared that it discovered natural gas in the Krishna Godavari basin (off Andhra Pradesh) revived the stock and the stock market. The Bombay Stock Exchange (BSE) Sensitive index closed at 2950.58 (2875.53) and the National Stock Exchange's S&P CNX Nifty at 951.45 (932.20). Among the ADRs, counters such as Satyam Computer, Infosys Technologies and ICICI Bank displayed firm trend. Reports that Lehman Brothers Holdings Inc has decided to use the information technology services of software companies Infosys, Wipro and Tata Consultancy Services Ltd seemed to have lifted the sentiment for Infosys. Infosys closed the week marginally higher at $70.48 ($69.90). Wipro, however, closed the week slightly lower at $28.24 ($28.73). ICICI Bank ended at $6 ($5.88) after the company posted a profit after tax of Rs 285 crore the quarter ended September 30, 2002 as against Rs 253 crore recorded in the first quarter of the current year. The Bank's profit after tax for H1-2003 was Rs. 538 crore as compared to Rs. 131 crore for H1-2002. ADRs such as Dr. Reddy's Lab, MTNL, VSNL and Silverline Technologies continued their downtrend and registered fresh 52-week low. All these counters, however, recovered from their yearly lows. MTNL recovered on reports that the Government may drop its proposed plan of merging it with Bharat Sanchar Nigam Ltd and may instead make it a subsidiary of BSNL. The counter closed at $3.95 ($3.97) after touching a 52-week low of $3.59. The counter of Dr. Reddy's has been under pressure in recent times following a couple of adverse developments in the company's R&D programme and US operations. The company's Q2 performance further aggravated the downslide. After notching a yearly low of $13.93, the ADR recovered to close the week flat at $14.45 ($14.40). As for premium of the ADR to the underlying equity concerned, Infosys continued trade with higher premium. The Infosys ADR now trades at a premium of 75.99 per cent compared to the last weekend premium of 80.34 per cent. However, there were not much deviations in the premium/discount of other counters.
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