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ADRs in 2009


Citigroup won the annual race to see who will get out data on the prior year's depositary receipts market, with a release yesterday. They cheated, since they annualized data running to the end of November 2009.
 
Its tallies showed that volume of DR trading fell 7% year over year with most of the fall accounted for by lower trading of Russian dollar-denominated Global Depositary Receipts on the London Stock Exchange.
 
Capital raising by new depositary issues went up 16% from 2008 to $15.9 bn, but still not even close to the record-breaking level of $50 bn reached in 2007. China was very active.
 
Overall, emerging markets accounted for the bulk of the new issues, 52%, but only one came through a classic U.S.-listed initial public offering, for Banco Santander Brazil, a monster ipo.
 
Following the change in the SEC rules of Oct. 2008, 872 new unsponsored ADRs were created by the depositary banks which can collect fees from shareholders in these companies for managing the ADRs, and for converting foreign shares into ADRs. This helps the banks, which is a matter of U.S. Policy these days, but can be costly for shareholders being nickeled and dimed for fees which cut into dividend yields.
 
Three of our shares were among the top ten secondary offerings in 2009, noted below for paid subscribers.
 
The recovery helped, as 55% of capital was raised in H2. To Q3, the last for which Citi has data, U.S. investment in non-U.S. equities rose 38% to $3.9 trillion.
 
By region and overall, CitiLiquid DR Index outperformed the S&P 500 by 18%, and more in Latin America and Emerging Asia.