(Source: PRNewswire)
NEW YORK, July 13 /PRNewswire-FirstCall/ -- American and global depositary receipt (DR) trading volume increased 14% to a record 72.1 billion DRs during the first six months of 2009 according to The Bank of New York Mellon, the world's leading depositary bank. As expected, DR trading value was significantly lower than records set one year ago. During the first six months of 2009 $1.3 trillion of DRs traded on U.S. and non-U.S. markets and exchanges. (1)
Total available DR programs grew by nearly half, rising to 3,096 from 2,149 a year ago, largely due to changes in U.S. regulations that made it easier to establish over-the-counter DR programs. Industry-wide, DR programs for issuers from 76 countries were available to investors at the half-year mark.
The Bank of New York Mellon ADR Index(R), a widely accepted industry benchmark, was up 9.92% year-to-date and down 31.79% compared to a year ago.
"Despite incredible volatility in equity prices in the midst of ongoing global financial turmoil, depositary receipts have once again demonstrated their strength as a cross-border investment vehicle. Trading volume is higher year-over-year while trading value is beginning to rebound," said Michael Cole-Fontayn, chief executive officer of The Bank of New York Mellon's Depositary Receipt business. "Since mid-April, DR issuance has exceeded cancellation, in part because emerging equity markets have rebounded after substantial drops in 2008. The Bank of New York Mellon has retained its dominant position because it is delivering new and promising investment vehicles to the world's cross-border equity investors."
In line with global economic conditions, capital raisings were significantly lower. Issuers from five countries completed 13 new primary and follow-on DR offerings, raising nearly $5 billion. Through June 2009, companies from 20 countries established 38 new sponsored DR programs.
U.S.-Listed Market Remains the Largest DR Trading Market
The major U.S. stock exchanges -- the New York Stock Exchange (NYSE) and NASDAQ -- remained the largest markets for DR trading, comprising 90% of all DR trading value worldwide. A record 60.7 billion U.S.-listed DRs, valued at $1.17 trillion, traded on U.S. markets during the first half of 2009. Compared with 52 billion DRs, valued at $2.1 trillion at mid-year 2008, this represented an increase of 14% in DR trading volume and a decrease of 44% in DR trading value year-on-year. The most actively traded U.S.-listed DRs included Brazil's Petrobras and Vale, Taiwan's Taiwan Semiconductor Manufacturing, Finland's Nokia and Mexico's Cemex.
According to The London Stock Exchange, 8.4 billion DRs valued at $97.6 billion traded on the International Order Book (IOB) at the half-year mark, 4.3% lower and 67% lower, respectively, year-on- year. The IOB is the primary trading platform for both LSE- and Luxembourg Stock Exchange (LuxSE)-listed DRs. Of the top 10 most actively traded programs, seven were from Russia, including Gazprom, Lukoil and Norilsk Nickel. India's Reliance Industries, Kazakhstan's KazMunaiGas Exploration Production and Korea's Samsung Electronics were also among the top ten most actively traded. (1)
Over-the-counter (OTC) and other DR trading value totaled more than $32.1 billion. The most active OTC-traded DR issues included Switzerland's Nestle and Roche, Japan's Nintendo, and Russia's Gazprom and Lukoil.
Total Non-U.S. Investment Value down 39% Year-Over-Year
As of March 31, 2009, according to statistics released in June by the U.S. Federal Reserve, the total amount of U.S. investment in equities decreased 39% year-on-year to approximately $14 trillion, while the value of U.S. investment in non-U.S. equities (both DRs and non-U.S. shares) decreased 49% to about $2.4 trillion. At the same time, non-U.S.
