American and global depositary receipt trading volume increased
14% to a record 72.1 bn in H1 according to The Bank of New York Mellon, a
leading depositary bank. However, because of the global downturn, trading
in ADRs and GDRs by value was significantly lower than records set one
year ago, at $1.3 trillion.
The number of available ADR and GDR stock traded rose by nearly
50% to 3,096 from 2,149 at the end of H1 2008. This resulted largely from
changes in U.S. SEC regulations in October 2007 making it easier for
depositary banks to establish unsponsored over-the-counter ADRS may not
raise U.S. capital and have reduced reporting and audit requirements in
Not all ADRs made money for investors of course. Particularly
smaller obscure companies whose unsponsored ADRs were launched by the
depositary banks are often a poor investment choice.
The revival of the ADR market was underlined by the issue of a new
Hong Kong-based company's stopck with capital raising in the U.S., a
rarity this year. CDC Enterprise, a maker of enterprise software, raised
$71.8 mn with its ADR issue last week.