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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Jyoti sharma who wrote (11370)	12/13/1997 9:39:00 PM
From: Rational	Read Replies (1) \| Respond to of 18056

Jyoti: A reason for the premium on the ADRs is that they are limited, i.e, about 21% of the KEP could be sold as per the govt fiat. At the time of IPO, they were oversubscribed and the premium was huge, more than 100%. Over time the price fell due to a decrease in the premium as well as the value of the underlying stock. That is, the hype factor is still there. Your point is, though, that the ADR values will eventually go up as the underlying asset value rises and won stabilizes; the premium remaining constant. One minor complication: the IMF has recently forced the Korean government to increase the percent of ownership of these blue-chips. When the extra allocation is available, the premium will fall somewhat even if the underlying security price remains constant. It is a complicated setting. I guess one can go by the chart and then pray god, given that the prices are lowest, historically. <g> Sankar