Depositary Receipts Saw Big Increase in 2014, Finds Citi

Non-U.S. companies raising $37.3 billion in capital through depositary receipt (DR) programs, more than tripling the mark raised in 2013, and the most since 2007, according to a report from Citi.

Total DR trading volumes rose by 8.7 billion shares since last year to reach 152 billion shares, driven by higher volumes in Asia and Latin America. Since 2006, overall DR trading volumes have grown at a Compound Annual Growth Rate of 9%.

Most of the money DR money raised in 2014, 88%, came from initial public offerings (IPOs), up five times from 2013.

Chinese companies accounted for more than half of this year’s DR IPOs, led by Alibaba Group, which had the largest IPO in history at over $25 billion.

In all, 18 different countries saw increases in terms of dollars raised and number of deals.

“The significant increase in depositary receipt capital raising and trading volumes shows that DRs are a beneficial vehicle for issuers and investors alike,” says Nancy Lissemore, global head of Depositary Receipt Services at Citi. “And with countries such as India and Taiwan embarking on DR regulatory changes to expand investor access, we see a lot of opportunity for growth.”

The number of unsponsored DR programs also surpassed 1,600, with volume up 56% from 2013.