BNY Mellon ADR Index finishes up 36%, more than 280 new DR programs
created worldwide NEW YORK, Jan. 13 /PRNewswire-FirstCall/ -- As
global equity markets experienced dramatic volatility in 2009,
depositary receipts (DRs) proved their value to investors as a
preferred vehicle for portfolio diversification and cross-border
investing, according to BNY Mellon's annual year-end report on the
DR industry. DR program establishment and capital raisings remained
off historical highs but were stronger year-on-year. Overall DR
performance, as tracked by the BNY Mellon ADR Index(SM), finished
the year 36% higher, while total DR trading volume reached record
levels, up 2% from 2008, even with declining equity values.
"Investors are using DRs to access global equities as they seek new
investment opportunities," said Michael Cole-Fontayn, chief
executive officer of BNY Mellon's Depositary Receipts business. "In
2010, we see great opportunities from emerging markets, as
evidenced by the continued shift in the flow of funds from
developed to emerging markets, especially the BRIC (Brazil, Russia,
India and China) countries. "U.S. institutional and retail investor
demand has driven the continued expansion of the unsponsored DR
marketplace and the creation of the BNY Mellon Composite Depositary
Receipt Index(SM), which benchmarks more than 870 DR programs from
over 50 countries. BNY Mellon remains committed to providing the
investment community with the widest array of investible products
to satisfy the need for comprehensive international investing,"
Cole-Fontayn added. Highlights include: -- 34 of the 35 BNY Mellon
ADR country indices posted higher returns in 2009, with the
Argentina, Brazil and India indices each posting returns above 100%
-- The world's largest DR issue as measured by value was Brazil's
Petrobras, with nearly $58 billion worth of DRs outstanding -- By
the close of 2009, investors were able to select from a record
3,127 sponsored and unsponsored DR programs for companies from 74
countries -- Issuers from emerging markets continued to dominate
many DR market metrics, accounting for 69% of capital raisings, 55%
of trading value and trading volume, and 50% of new sponsored
programs -- DR capital raisings totaled $32 billion, a 122%
increase from 2008's $14.4 billion, led by issuers from China,
India and Taiwan. The largest DR capital-raising transaction in
2009 was ING Group, which raised $11 billion. Further results from
BNY Mellon's year-end industry report follow. Overall volume of 135
billion DRs valued at $2.7 trillion traded during 2009 2009 saw
record trading volume of 135 billion DRs, a 2% increase on last
year. Overall DR trading value finished at $2.7 trillion, a
decrease of 35% year-over-year. The major U.S. stock exchanges --
the New York Stock Exchange (NYSE), NYSE Amex and NASDAQ --
remained the largest trading markets, accounting for 84% of total
DR trading value. Nearly 114 billion DRs traded on U.S. exchanges,
valued at $2.5 trillion during 2009. European-listed DR trading
volume increased 17% on $214 billion in value on the International
Order Book (IOB), the primary trading platform for DRs listed on
both the Luxembourg Stock Exchange (LuxSE) and the London Stock
Exchange (LSE)(1). Other trading, primarily DRs traded
over-the-counter (OTC) and on PORTAL, NASDAQ's electronic trading
platform for the 144A private placement market, comprised an
estimated 2.4 billion in volume and $98 billion in value. More than
280 new DR programs established for issuers from 35 countries In
2009, 282 new sponsored and unsponsored DR programs for companies
from 35 countries were established(2). Of 2009's new sponsored DR
programs, 26 were listed on stock exchanges -- 14 in the U.S. and
12 in Europe. Sixty issuers chose to trade their new sponsored DRs
on the U.S. OTC market, with three issuers using the OTCQX
platform. The remaining new sponsored programs trade on various
other platforms. Chinese issuers established the highest number of
new sponsored programs with a total of 14. In response to investor
and broker demand, an additional 183 new unsponsored DR programs
were established in 2009. There are now more than 1,000 unsponsored
DRs available for issuers worldwide. Overall, at the close of 2009,
investors were able to select from a record 3,127 sponsored and
unsponsored DR programs for companies from 74 countries. DR program
availability has now increased nearly 50% during the past two years
as an increasing number of the world's largest companies now have
some form of DR program available to investors. Emerging markets
lead the recovery The growing prominence of emerging markets is
best illustrated by a striking shift in the flow of capital.
According to fund tracking service provider EPFR Global using
public and proprietary sources(3), from January 1 to December 31,
2009, aggregate fund flows to emerging markets totaled $80
billion(4). During the same time period, there was a total outflow
of $61 billion(5) from all developed market equity funds and $89
billion from U.S. equity funds alone. DR issuers from emerging
markets continued to dominate many DR market metrics, accounting
for 69% of the year's DR capital raisings, 55% of DR trading value,
55% of DR trading volume, and 50% of new sponsored DR programs. The
BNY Mellon Emerging Markets ADR Index returned over 70% in 2009
while the BNY Mellon BRIC Select ADR Index returned 86%. DR capital
raisings rebound from 2008 lows, $32 billion raised by 63 issuers
DR issuers from 15 countries completed 63 initial public offerings
(IPOs) and follow-on offerings, raising $32 billion, a 122%
increase from 2008's $14.4 billion. The vast majority of offerings
occurred in the second half of the year as market conditions
continued to improve. This included the year-end follow-on offering
from The Netherlands' ING Group, which raised $11 billion in DRs,
and the October IPO of Banco Santander Brasil, which raised $4.5
billion in DRs. Other DR capital-raising transactions during 2009
were dominated by issuers from China, India and Taiwan. Of the 63
DR capital raising transactions, 40, totaling $8.7 billion, were
from companies in these three countries, representing 71% of global
transactions and 27% of the year's total value. BNY Mellon ADR
Index up 36% Overall DR performance, as tracked by the BNY Mellon
ADR Index, rose strongly during 2009. On December 31, 2009, the
Index closed at 181.46, up 36% for the year. The BNY Mellon ADR
Index remains the only real-time index to track all American
Depositary Receipts, New York Shares and Global Registered Shares
that trade on the NYSE, NYSE Amex and NASDAQ. All but one of the 35
BNY Mellon ADR country indices posted higher returns in 2009, with
the Argentina, Brazil and India ADR country indices posting returns
greater than 100%. The BNY Mellon Finland ADR Index was the sole
decliner, falling nearly 15% last year. In November 2009, BNY
Mellon launched the Composite Depositary Receipt Index, a new
all-encompassing measure of the DR universe. The BNY Mellon
Composite Depositary Receipt Index comprises all American
depositary receipts, New York Shares, and Global Registered Shares
that trade on the NYSE, NYSE Amex, NASDAQ and OTC, as well as
global depositary receipts (GDRs) that trade on the LSE. At
year-end, the Composite Depositary Receipt Index had more than 870
constituents and a free-float market capitalization as defined by
Dow Jones & Company of $10.2 trillion. More than $2 billion of
exchange-traded fund (ETF) assets were directly correlated to the
BNY Mellon family of DR indices at the close of 2009. The growing
popularity of ETFs based on DRs was evidenced by the creation of
the Direxion Daily China Bull 3x Shares, Direxion Daily China Bear
3x Shares, the Claymore/BNY Mellon EW Euro-Pacific LDRs and the
Claymore/BNY Mellon Small Cap LDRs ETFs. The ETFs directly track
various BNY Mellon DR indices. In total, 13 ETFs are now
benchmarked to BNY Mellon DR indices. Regional Review: Asia-Pacific
Trading from Asia-Pacific issuers totaled $760 billion,
representing more than 35 billion DRs. The most actively traded DR
in the region was Taiwan Semiconductor Manufacturing, which traded
nearly $47 billion in DRs in 2009. The other top-traded DR programs
in the region were JA Solar Holdings, Yingli Green Energy, Suntech
Power Holdings and United Microelectronics, all of which traded
more than one billion DRs in 2009. The region's largest DR program
as measured by DR value was Baidu, with more than $10.2 billion in
DRs. The region's issuers established 45 new sponsored programs and
raised more than $8.7 billion in DRs with 45 capital-raising
transactions. Significant DR offerings included the IPOs of three
companies within India's Tata Group - Tata Steel, Tata Motors and
Tata Power - as well as Taiwan's Tatung, which raised $197 million
on the Luxembourg Stock Exchange. Also of note were the NASDAQ IPOs
of China's Shanda Games and Changyou.com. The follow-on offerings
by Chinese alternative energy companies Suntech Power, ReneSola and
Trina Solar were an additional market highlight. Sixteen new
issuers chose to trade OTC, with one, CMA Corporation, opting to
list on the OTCQX platform. Four issuers listed on the NYSE, five
chose NASDAQ, 10 chose the LuxSe, and one chose the LSE. Of note
were Esprit's unsponsored to sponsored conversion and the
establishment of an over-the-counter DR program for Commonwealth
Bank of Australia. Emerging Europe, Middle East and Africa (EEMEA)
The EEMEA region's DR trading reached a value of $382 billion at
year-end. Russia's Gazprom was the region's most actively traded
DR, with trading value of nearly $66 billion DRs globally. The
region's top five most actively traded DRs also included Israel's
Teva Pharmaceuticals, Russia's Lukoil and Rosneft, and South
Africa's AngloGold Ashanti. Issuers in the EEMEA region established
15 new sponsored DR programs and completed seven new DR
capital-raising transactions valued at $1.5 billion. Follow-on
offerings were completed by Russia's Evraz Group and GlobalTrans,
South Africa's Anglogold Ashanti and Kazakhstan's Zhaikmunai, while
Ukraine's Agroton completed the region's only IPO with DRs. Ten new
issuers chose to trade OTC, including Russia's RusHydro, TMK and
Tatneft, and two companies, including Lebanon's Byblos Bank, chose
to list their DRs on the LSE. Gazprom Neft also became Russia's
first DR issuer to trade on the OTCQX platform. Latin America $780
billion of Latin American DRs traded during the year. Trading
volume for Latin American issuers topped 36 billion DRs in 2009,
flat from 2008's total. Brazil's Petrobras (common and preferred)
traded more than $234 billion by year-end, while Vale (common and
preferred) traded more than $184 billion. The region's top five
most actively traded programs also included Brazil's Itau Unibanco
and Banco Bradesco, as well as Mexico's Cemex. The region's, and
the world's, largest DR program as measured by value was Brazil's
Petrobras, with nearly $58 billion worth of DRs outstanding. With
nearly $27 billion in DRs outstanding at the close of the third
quarter, Mexico's America Movil was the region's second-largest
issue.(6) Latin American issuers established 17 new sponsored DR
programs and completed seven DR capital-raising transactions,
raising more than $6.3 billion in 2009. In addition to Banco
Santander Brasil's $4.5 billion IPO, the $179 million follow-on
offering by NYSE-listed Gol Linhas Aereas Inteligentes was a
highlight. Fifteen new issuers chose to trade OTC, including
Brazil's Banco do Brasil and OGX, while two listed on the NYSE. Two
of Brazil's largest food producers, Perdigao and Sadia, merged in
2009 to form Brasil Foods, in a deal valued at $8.8 billion.
Western Europe Nearly $870 billion of DRs from Western Europe
traded in 2009, a year-on-year decrease of 26%. The UK's British
Petroleum was the region's most active DR program with over $76
billion traded by year-end. Finland's Nokia, Luxembourg's
ArcelorMittal, France's Total and the UK's Rio Tinto rounded out
the region's top five. Switzerland's Nestle and Roche, the UK's
Anglo American and Germany's Allianz and E.ON were the region's top
five most active OTC-traded DRs, aggregating nearly $20 billion by
year-end. The UK's British Petroleum remained the region's largest
DR program as measured by DR assets, with nearly $46 billion in DRs
outstanding, a 2% increase from 2008. The only other issue with
more than $20 billion in DR value was the UK's Royal Dutch Shell.
Western European issuers established 22 new sponsored DR programs
and completed four capital-raising transactions valued at nearly
$15.1 billion in 2009. In addition to ING Group's $11 billion
follow-on offering, the $3.2 billion follow-on offering by
Luxembourg's ArcelorMittal was also a highlight. Nineteen new
issuers chose to trade OTC, including Germany's Deutsche Post.
Three, including Belgium's AB Inbev, listed on the NYSE, while one
chose NYSE Amex. In March, HSBC successfully undertook one of the
most significant rights offerings in UK history, offering
shareholders five new shares for every 12 shares they held at an
approximate 40% discount. When the offering closed, shareholders
had taken up 96.6% of HSBC's $18.63 billion rights issue. BNY
Mellon Solidifies Its Industry Leadership During 2009, BNY Mellon
continued to demonstrate its DR leadership position across several
key categories. Specifically, BNY Mellon was selected as depositary
for more sponsored DR programs than all other depositary banks
combined. BNY Mellon also continued to win established DR programs
from its competitors. Five issuers, including Brazil's Banco
Bradesco, Brasil Telecom, and Eletropaulo and Mexico's Grupo TMM,
selected BNY Mellon as their successor depositary. In total, 187
issuers have switched 224 DR programs to BNY Mellon from other
depositary banks since 1990. BNY Mellon acts as depositary for more
than 2,100 American and global depositary receipt programs, acting
in partnership with leading companies from 67 countries. With an
unrivaled commitment to helping securities issuers succeed in the
world's rapidly evolving financial markets, the company delivers
the industry's most comprehensive suite of integrated depositary
receipt, corporate trust and stock transfer services. Learn more at
http://www.bnymellon.com/dr. BNY Mellon is the corporate brand of
The Bank of New York Mellon Corporation (NYSE:BK). BNY Mellon is a
global financial services company focused on helping clients manage
and service their financial assets, operating in 34 countries and
serving more than 100 markets. The company is a leading provider of
financial services for institutions, corporations and
high-net-worth individuals, providing superior asset management and
wealth management, asset servicing, issuer services, clearing
services and treasury services through a worldwide client-focused
team. It has $22.1 trillion in assets under custody and
administration and $966 billion in assets under management,
services $11.9 trillion in outstanding debt and processes global
payments averaging $1.6 trillion per day. Additional information is
available at bnymellon.com. This release is for informational
purposes only. BNY Mellon provides no advice nor recommendation or
endorsement with respect to any company or securities. Nothing
herein shall be deemed to constitute an offer to sell or a
solicitation of an offer to buy securities. Depositary Receipts:
Not FDIC, State or Federal Agency Insured; May Lose Value; No Bank,
State or Federal Agency Guarantee. Note: New sponsored DR
statistics count bifurcated GDRs (i.e., those with a 144A and a
Regulation S tranche) as one new program and exclude successor DR
programs. (1) Data provided by Bloomberg. (2) Data from BNY Mellon
and stock exchanges. (3) Fund flow data provided by EPFR Global.
(4) Includes mutual funds and ETFs. (5) Ibid. (6) Data as of
September 30, 2009 provided by various U.S. stock exchanges.
DATASOURCE: BNY Mellon CONTACT: Dori Flanagan, +1 212-815-2291, ;
Joe Ailinger, +1-617-722-7571, Web Site:
http://www.bnymellon.com/dr
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