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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (65165)	8/12/2010 6:01:20 AM
From: elmatador	Respond to of 219563

ease the way for western companies to raise capital from increasingly wealthy emerging market investors, Emerging market bourses hunt western blue chips By Steve Johnson Published: August 8 2010 13:18 \| Last updated: August 12 2010 08:28 A swathe of emerging market stock exchanges are lining up to launch depositary receipt programmes, allowing local investors to access foreign companies without leaving their home market. The move would also ease the way for western companies to raise capital from increasingly wealthy emerging market investors, mirroring a trend that has seen emerging market companies raise almost $200bn (£125bn, €151bn) by launching American and (European-listed) global depositary receipts since 2005. EDITOR’S CHOICE Private equity returning to emerging markets - Aug-08Developing nations need to ‘inhale’ global capital - Jul-29Investors face a world of correlation - Jul-23Investors plan to flee funds of funds - Jul-15A new tool for wealth managers - Jan-31Variety is best for passive approach - Nov-29In May, Standard Chartered, the UK-headquartered but emerging market-focused bank, blazed a trail by listing the first Indian depositary receipt – raising $500m in the process. Telefónica, the Spanish telecoms company, and Dufry Group, a Swiss retailer, have listed Brazilian depositary receipts, while a number of Indian companies have launched DRS in Singapore. Anthony Moro, head of emerging markets for BNY Mellon’s depositary receipts operation, said he expected the process to accelerate, with five to 10 “super regional exchanges”, such as Dubai, South Africa, Hong Kong and Brazil, emerging as centres for DR activity. “We are calling it alphabet DRS and it’s a topic that we are getting an incredible amount of interest in,” said Mr Moro. “It’s a concept that is catching on because the DR mechanism makes it very easy to go across borders. It makes something global look like something local. Investors will always prefer to invest in their home market if they can.” Claudine Gallagher, global head of depositary receipts at JPMorgan, added: “I definitely think it’s a trend. Taiwan, Japan, Russia and Hong Kong have all passed regulations to allow DRS in their markets. Markets like Brazil, Singapore and Taiwan have grown up. They have breadth and depth. The local investor base is savvy enough now and interested in having foreign diversification.” Ms Gallagher said she expected to see DR issuance on the Hong Kong market “in the next six to nine months”. Ayden Dagg, head of depositary receipt services for the Emea region at Citi, said the bank was in “ongoing discussions” with clients looking to list DRS in Hong Kong, while it had also developed a Japanese DR structure with Mitsubishi UFJ. Citi is also in the “final stages” of launching 10 unsponsored Brazilian DRS, which do not need the permission of the company involved but cannot be used to raise capital, a project it said was driven by domestic demand in Brazil. Mr Moro said BNY Mellon was working towards creating DRS for Russia; South Africa, where Oando, a Nigerian oil company could be the first to launch; and Japan, which has seen “an incredible amount of interest”. Standard Chartered and rival HSBC have said they intend to issue DRS on the Shanghai exchange if and when Chinese regulations allow. Depositary receipt programmes, which share the same pot of liquidity with the primary listing, also have an advantage over multiple stock listings, which create fragmented pools of liquidity. However, Mr Moro said companies would only list DRS in countries in which they had an established footprint, given the compliance costs of operating sponsored programmes. Mr Dagg said most companies seeking to raise capital were still looking at London and New York, rather than emerging markets.