At a time when markets are more volatile than at any point since the 2008 financial crisis, it’s critically important for company executives to be in contact with investors. Some investors will get a chance to hear directly from major ADR issuers later this week at the first Deutsche Bank Depositary Receipts Virtual Investor Conference of 2020.
Held in conjunction with Virtual Investor Conferences, representatives from 10 ADR issuers based in seven countries—Australia, China, including Hong Kong, Denmark, France, Germany, and the UK—will provide business updates and answer questions from investors and analysts.
Each presentation will be followed by a live Q&A session with attendees and is available on demand.
2019 Depositary Receipt Recap
Depositary Receipts, also known as DRs, allow for international companies to list their shares on foreign markets. Many international companies list their shares in the U.S. via ADRs—American Depositary Receipts—to raise capital or broaden their investor base.
“American Depositary Receipts and American Depositary Shares are a great way for foreign companies to have their shares trade in the U.S., and for U.S. investors to own a piece of those companies,” said Jason Paltrowitz, executive vice president, corporate services at OTC Markets.
According to Deutsche Bank (NYSE: DB), one of the four main depositary banks, China continues to be the global leader when it comes to the Depositary Receipt market.
Chinese companies accounted for 71% of the capital raised in the global Depositary Receipt market last year—down from 75% in 2018. Latin America, on the other hand, saw the biggest growth year-over-year. Latin American companies raised 60% more capital via Depositary Receipts in 2019 than in 2018, led by Brazil.
“What we’re seeing in recent years is China being very active,” said Zafar Aziz, head of strategic sales and IR advisory trust & agency services at Deutsche Bank. “Most of our new business in the last few years has come through Chinese-U.S. listings.”
Source: Deutsche Bank
Overall, $17 billion was raised last year via Depositary Receipt listings, marking the second-highest reading in the last five years. In terms of trading activity, over 161 billion Depositary Shares traded last year, roughly in-line with 2018.
China, Hong Kong, and Brazil remain the most active regions for Depositary Receipt trading, with companies from those regions representing 27% and 21% of total DR volume respectively.
Source: Deutsche Bank
As of the end of 2019, there were 2,945 ADRs globally. Unsurprisingly, U.S. investors own the greatest portion, roughly 75%, of global Depositary Receipt assets.
Aziz noted that ADRs are popular with both institutional and U.S. retail investors as they trade and settle in the same way as US domestic securities and are quoted in U.S. dollars. The virtual conference is a great platform for the full range of investors.
“We also see a lot of U.S. institutions investing in ADRs through separately managed accounts or SMA funds, particularly focused on the retail segment where some of these funds are marketed via wealth management platforms,” he said.
Source: Deutsche Bank
Hearing Directly From American Depositary Receipt Issuers
Investors interested in Chinese or healthcare ADRs may have particular interest in this week’s conference. Of the 10 companies presenting, 9 are based in China and/or in the healthcare/biotech industries. A British energy company and an Australian telecoms company will also be presenting.
Organizers do not expect global travel restrictions put in place because of the COVID-19 virus to hinder the conference, as it is conducted virtually. In fact, it may have increased demand, according to Aziz.
“Especially now with the coronavirus situation, it’s even more important to provide this facility,” he said last week. “We have a lot of interest from Chinese companies for next week’s event.”
To learn more about attending this week’s conference, click here.
8:30 AM ET: HK Electric Investments (Pink: HKVTY)
9:30 AM: Aesthetic Medical International Holdings Group Limited. (NASDAQ: AIH)
10:00 AM: Genmab A/S (NASDAQ: GMAB)
10:30 AM: Ipsen S.A. (Pink: IPSEY)
11:00 AM: Merck KGaA (Pink: MKKGY)
11:30 AM: SSE PLC (Pink: SSEZY)
8:30 AM: Hutchison China MediTech Limited (NASDAQ: HCM)
9:00 AM: China Online Education Group (NYSE: COE)
9:30 AM: China Distance Education Holdings (NYSE: DL)
10:00 AM: Telstra Corporation (Pink: TLSYY)
To learn more about attending this week’s virtual conference, click here.
Image credit: Wikimedia Commons