Financial Daily from THE HINDU group of publications
Monday, Dec 30, 2002
Financial Daily from THE HINDU group of publications Monday, Dec 30, 2002 |
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Markets
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Commentary Columns - ADR Watch Dr. Reddy's Lab, Wipro move up B. Krishnakumar
THE American stock market indices ended last week on a weak note. Except for a rally on Monday, the market sentiment on the US bourses remained weak. Trading volumes ebbed owing to market holidays. The rise in price of crude oil coupled with the threat of war with Iraq continued to affect American stock market sentiment. Going by the past price movement, it appears that the US market is set to record a net decline for the third year in succession. The trend on the Indian bourses, however, was much more buoyant in comparison to the US markets. After initial run-up in Reliance Industries and a few pharma companies, the technology counters attracted buying interest as the week progressed. The benchmark indices - Sensex and Nifty - managed to seek higher levels during the week while Dow Jones Industrial Average and Nasdaq Composite recorded net declines. Mirroring the overall weakness in the American market, the ADR price of quite a few Indian companies were pegged to slightly lower levels. However, companies such as Dr Reddy's Laboratories and Wipro managed to eke out gains during the week. After a sharp rise in the earlier week, the ADR price of Dr Reddy's moved up further to $ 19.05 on Friday from the previous week's close of $ 18.77. In the case of Wipro, the price increased from $ 33.21 to $ 34. After a sharp spurt of 7.6 per cent in the previous week, Infosys Technologies' ADR price dropped a bit during the just concluded week. The ADR price of Infosys declined to $71.4 from $ 74.1. On the other hand, the share price of Infosys recorded a marginal increase during the week in the domestic market. As a result, the premium of ADR price in relation to the underlying stock price declined to 43.6 per cent from 54 per cent the week before. In the case of Dr.Reddy's Laboratories, the ADR price moved up by about 1.5 per cent while the share price in the domestic market shot up by 3.35 per cent for the week. As a result, the ADR prices are now traded at a discount of 1.1 per cent to the domestic share price. The price movement in other ADR price of other companies was not all that significant. Satyam Computer's ADR price inched up to $ 13.2 from $ 13.1. In the case of banking companies, both HDFC Bank and ICICI Bank saw a marginal decline in their ADR prices. The ADR price of HDFC Bank dropped to $ 13.4 from $ 13.75 while the ICICI Bank's price dropped to $ 6.6 from $ 6.7. The two telecom PSUs — VSNL and MTNL — saw their ADR prices drop marginally for the second week in succession. VSNL's ADR dropped to $ 4.2 from the earlier week's close of $ 4.27 while MTNL's price dropped to $ 4.1 from $ 4.37.
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