The Bank of New York, reported that both investment and trading value in American and global depositary receipts surpassed $1 trillion for the first time in 2005. More than 1,900 sponsored DRs for issuers from 73 countries are now available to investors.
As part of its analysis, The Bank of New York also reported that the depository receipts market had strong levels of capital raisings in 2005.
“The $1 trillion milestones underscore the significant and growing role DRs play in broadening the market to both issuers and investors alike, a trend which we expect to continue in 2006,” said Christopher Sturdy, managing director and head of The Bank of New York’s Depositary Receipt Division.
According to the Bank’s analysis, the total value of investment in depository receipts exceeded $1 trillion at the end of the third quarter. Investment values in US-listed DRs totaled $657 billion on September 30, 2005, a jump of 36% from the same time last year. Overall value of investment in European-listed DRs was estimated to be $225 billion and investment in over-the-counter-traded and other depository receipts was estimated to be $120 billion.
Companies with more than $20 billion in depository investment as of September 30, 2005 included the UK’s BP ($82.7 billion), Royal Dutch Shell ($36.1 billion), Vodafone ($20.9 billion) and GlaxoSmithKline ($20.9 billion), Russia’s Lukoil ($31.6 billion), Mexico’s America Movil ($25.7 billion) and Brazil’s Petrobras ($23.7 billion).
The latest US Federal Reserve statistics as of September 30th, 2005, show the total value of US investment in non-U.S. equities (both DRs and shares) increased to $2.8 trillion, an increase of 29% from the same time last year. The statistics show that investment in non-US equities now comprises 15.8% of all US equity investment.
The bank reported that nearly $1.2 trillion of depository receipts traded on US and non-US markets and exchanges in 2005. In the US, 39.2 billion depository receipts, valued at a $1 trillion, traded on the New York Stock Exchange, NASDAQ and the American Stock Exchange, representing increases of 5% in depository receipts trading volume and 17% in trading value.
Depository receipts trading on exchanges outside the US also showed growth, with a 19% increase from 2004, traded on the London Stock Exchange’s International Order Book, the primary non-US trading market for depository receipts.
At least 27 issuers from 16 countries posted annual depository receipt trading value in excess of $10 billion. Among these are China’s Baidu.com and Netease.com, France’s Total, Ireland’s Elan, Israel’s Teva Pharmaceutical, Mexico’s America Movil, Finland’s Nokia, Russia’s Gazprom and Lukoil and the UK’s BP, GlaxoSmithKline, Royal Dutch Shell and Vodafone.
The bank reports that companies from 36 countries established 162 new depository receipt programs during the year, compared to 126 programs from 29 countries during 2004. More than 20% of the year’s new depository receipt programs were established by companies from India, including Patni Computer Systems, UTI Bank and Essar Projects.
Emerging market depository receipt issuers dominated. Issuers from India, Taiwan and Brazil, accounted for the majority of all DR capital raisings by number of transactions while issuers from Taiwan, the UK, Korea, and Russia accounted for the largest amounts of capital raised.