Caiman Valores
Contrarian, long-term horizon, research analyst, value

Analyzing Why BHP Billiton's American Depositary Receipts Trade At Different Prices

For some time now, I have been trying to understand a perplexing phenomenon on the New York Stock Exchange (NYSE), which is, why do BHP Billiton Ltd's (BHP) American Deposit Receipts (ADR), trade at premium to BHP Billiton Plc's (BBL) ADRs. At the time of writing, the price differential sees BHP Ltd trading at a premium of around 18% to BHP Billiton Plc. On face value, this makes BHP Billiton Plc the superior investment for U.S. based investors seeking exposure to BHP Billiton, because they are able to obtain a superior dividend yield for exposure to the same company.

In this article, I am going to investigate in detail why this premium exists, and explain which

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