the depositary receipt markets - 2010 market review.pdf
TRANSCRIPT
The Depositary Receipt Markets
2010 Mid-Year Market Review
Who’s helping you?
1
Dear Clients and Friends, The numbers are in—U.S. investors have returned to overseas investing with a
passion, and that’s reflected strongly in the world of depositary receipts. In the
first half of 2010, depositary receipts showed their remarkable strength as a
vehicle for international investing as both worldwide trading value and volume
reached all-time highs. During the first six months of 2010, 78.1 billion DRs,
valued at $1.84 trillion, traded on U.S. and non-U.S. markets and exchanges, an
increase of 8.3% and 41.5%, respectively, from the same time last year. These
numbers are in dramatic contrast to last year’s.
The increase in DR trading value and volume can be traced to the upsurge in U.S.
investment in non-U.S. equities. In the first six months of 2010, the total value of
U.S. investment in non-U.S. equities (both DRs and non-U.S. shares) increased a
remarkable 68% to about $4.2 trillion. Non-U.S. equities accounted for 19.8% of all
equity investment in the U.S., an increase from 18.4% at the same time last year.
Emerging markets dominated the depositary receipt scene in the first half of
2010, especially the BRIC countries—Brazil, Russia, India and China. India and
China led new DR program establishment and DR capital raisings, and the two
most actively traded DR programs—Vale and Petrobras—were both from Brazil.
During the first six months of 2010, BNY Mellon grew its depositary leadership
position across many metrics, acting for 59% of all new sponsored DR programs
and 83% of all DR capital-raising transactions. BNY Mellon acts as depositary for
63% of all sponsored DR programs globally.
As a global strategic advisor, BNY Mellon distinguished itself by supporting major
international corporate events for companies such as VimpelCom, Rusal, and
Telmex Internacional, all of which are described in greater detail on pages 10-11.
In June, BNY Mellon demonstrated its strategic focus on innovation in the
financial markets by acting as structural advisor to the U.K. bank Standard
Chartered when it became the first company to list an Indian depositary receipt
program in India and the first non-Indian company to sell shares (in the form of
Indian depositary receipts) directly to Indian investors.
We look forward to continuing our tradition of growth and innovation in 2010 and
to supporting our clients by further integrating the world’s markets.
Michael Cole-Fontayn
Michael Cole-Fontayn Chief Executive Officer,
Depositary Receipts Division
“BNY Mellon demonstrated its strategic focus on innovation in the financial markets by acting as structural advisor to the U.K. bank Standard Chartered when it became the first company to list an Indian depositary receipt program in India and the first non-Indian company to sell shares (in the form of Indian depositary receipts) directly to Indian investors.”
During the first six months
of 2010, BNY Mellon grew
its depositary leadership
position across many
metrics, acting for 59%
of all new sponsored
DR programs and 83%
of all DR capital-raising
transactions.
2
Table of Contents
Depositary Receipt Market Highlights 2
Depositary Receipt Establishment 3
Depositary Receipt Trading 4
Depositary Receipt Capital Raisings 6
Depositary Receipt Institutional Demand 7
International Investing Trends 8
The BNY Mellon Depositary Receipt Indices 9
BNY Mellon’s Depositary Receipt Leadership 10
BNY Mellon Depositary Receipt Contacts 12
Depositary Receipt Market Highlights
• American and global depositary receipt (DR) trading volume increased
8.3% to 78.1 billion, a record high.
• During the first six months of 2010, $1.84 trillion of DRs traded on
U.S. and non-U.S. markets and exchanges, a record high and a 41.5%
increase year-over-year.
• The total value of U.S. investment in non-U.S. equities (both DRs and
non-U.S. shares) increased 68% to about $4.2 trillion. At the same
time, non-U.S. equities accounted for 19.8% of all equity investment in
the U.S., an increase from 18.4% at the same time last year.
• At the mid-year mark, companies from 19 countries had established
64 new sponsored DR programs, and 50 new unsponsored DR
programs had been established for issuers from 15 countries. The
number of available DR programs rose to 3,214 from 3,096 a year
ago. Industry-wide, DR programs for issuers from 76 countries were
available to investors.
• The number of DR capital-raising transactions was significantly higher
than the 13 at the mid-year mark last year. In the first half of 2010,
issuers from nine countries completed 44 new primary and follow-
on DR offerings, raising nearly $4.1 billion. India and China together
accounted for 34 of the offerings and about half the total value raised.
• During the first half of 2010, overall DR performance as evidenced by
TheBNYMellonADRIndex�wasbroadlylower.OnJune30,2010,
the Composite ADR Index closed at 152.86, down 15.76% year-to-
date, while still managing a 4.71% gain year-on-year.
The BNY Mellon ADR Index is a service mark owned by The Bank of New York Mellon Corporation.
3
During the first half of 2010, 64 new sponsored programs for
issuers from 19 countries were established, an increase of 25
programs from the same period last year. Of 2010’s new DR
programs, 30 were listed on stock exchanges — 11 in the United
States and 19 in Europe. The remaining DR programs traded on
various OTC markets.
India led with 18 new programs, followed by nine from China,
five from Russia and four each from Australia, Brazil, Japan and
the U.K. Of the U.S. OTC-traded programs established in the
first half of 2010, one issuer, the U.K.’s Britvic, chose to list its
DR program on the OTCQX platform.
In first half of 2010, 50 new unsponsored DR programs were
established for issuers from 15 countries, bringing the total
number of unsponsored DR programs to 1,080 at the mid-
year mark. In 2010, notable issuers that converted their
unsponsored DR programs to sponsored programs included
Denmark’s Carlsberg and Japan’s Takeda Pharmaceutical.
Depositary Receipt Establishment
Source: BNY Mellon. All figures as of June 30, 2010.
New depositary receipt program statistics exclude successor programs. Total depositary receipt statistics include all active programs and count each bifurcated GDR separately.
The number of available DR programs rose to 3,214 from 3,096
a year ago, largely due to recent changes in U.S. regulations
that make it easier to establish over-the-counter-traded DR
programs. India remained the country with the largest number
of DR programs with 302 (all of which were sponsored),
followed by Japan with 272 and the U.K. with 239. China came
close behind with 232, with Russia’s 219 completing the top
five. Industry-wide, DR programs from issuers in 76 countries
were available to investors at the half-year mark.
New Depositary Receipt ProgramsBy Type
New Depositary Receipt ProgramsBy Country, 1H ‘10
18
9
5
32
India
China
Russia
Others
0
50
100
150
200
'01 '02 '03 '04 '05 '06 '07 '08 09 1H ‘10*
U.S.-Listed OTC-Traded GDR
* Note: 2010 represents half-year figures.
Total Depositary Receipt ProgramsBy Type
Total Depositary Receipt ProgramsBy Country, 1H ‘10
0
500
1,000
1,500
2,000
2,500
3,000
3,500
U.S.-Listed OTC-Traded GDR
'01 '02 '03 '04 '05 '06 '07 '08 09 1H ‘10*
302
272
239
234
190
1,987
India
Japan
UK
China
Russia
Others
* Note: 2010 represents half-year figures.
New Sponsored and Unsponsored DR Program Establishment
Total Sponsored and Unsponsored DR Programs
4
American and global depositary receipt trading volume
increased 8.3% to 78.1 billion DRs during the first six months
of 2010. Also during that period, $1.84 trillion of DRs traded
on U.S. and non-U.S. markets and exchanges, a year-on-year
increase of 41.5%. Both figures are all-time highs.
U.S.-Listed Market Remains the Largest DR Trading Market
U.S.-listed programs accounted for nearly 90% of all DR trading
value worldwide. The major U.S. stock exchanges — the New
York Stock Exchange (NYSE) and NASDAQ — remained the
largest markets for DR trading. In total, 66.4 billion U.S.-listed
DRs, valued at $1.65 trillion, traded on U.S. markets during the
first half of 2010. Compared with 60.7 billion DRs, valued at
$1.17 trillion at mid-year 2009, this represents an increase of
9.4% in DR trading volume and an increase of 41.0% in DR
trading value, year-on-year. The most actively traded U.S.-listed
DRs included Brazil’s Vale and Petrobras, the U.K.’s BP, Finland’s
Nokia and France’s Alcatel-Lucent.
Depositary Receipt TradingU.S.-Listed, 1H ‘10
0
.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
'01 '02 '03 '04 '05 '06 '07 '08 '09 1H ‘10*
0
20
40
60
80
100
120
Depositary Receipt Trading ValueBy Exchange or Market, 1H ‘10 (bb)
U.S-Listed Depositary Receipt Trading ValueBy Country, 1H ‘10 (bb)
$443.8
$331.2
$259.6$65.7
$49.5
$507.1Brazil
UK
China
Mexico
Israel
Others
$1,342.6
$312.6
$36.4$152.4
$1.7
NYSE
NASDAQ
OTC
LSE/LuxSE
NYSE Amex
* Note: 2010 represents half-year figures.
Val
ue (
$tr
)
Vol
ume
(bb)
Depositary Receipt Trading
Most Active U.S.-Listed Depositary Receipt Programs - by Value
Value Volume Company Country (bb) (mm)
BP U.K. $149.5 3,810.0
Baidu China $125.2 689.7
Vale - Common Brazil $104.7 3,746.4
Petroleo Brasileiro - Common Brazil $82.5 2,019.5
Teva Pharmaceutical Israel $48.0 831.4
Nokia Finland $45.0 3,705.4
BHP Billiton Australia $43.4 605.9
Vale - Preferred Brazil $34.4 1,439.9
Itau Unibanco Holding Brazil $33.3 1,669.2
Petroleo Brasileiro - Preferred Brazil $30.6 851.2
Source: BNY Mellon and various stock exchanges. All figures as of June 30, 2010.
5
Depositary Receipt Trading
According to the London Stock Exchange (LSE), 9.7 billion DRs
valued at $152.4 billion traded on the International Order Book
in the first six months of 2010, 13.1% higher and 56.2% higher,
respectively, year-on-year. Of the top 10 most actively traded
programs, nine were from Russia, including Gazprom, LUKOIL,
Evraz, Uralkali, VTB and Norilsk Nickel.
Over-the-counter (OTC) and other DR trading value totaled
$36.4 billion, an increase from $32.1 billion last year, representing
13.4% growth. Trading volume totaled 2.0 billion DRs,
representing an 11% increase from last year’s 1.8 billion at the mid-
year mark. The most active OTC-traded DR programs included
Swiss issuers Nestlé and Roche, as well as Japan’s Nintendo.
Most Active IOB-Traded Depositary Receipts - by Value
Value Volume Company Country (bb) (mm)
Gazprom Russia $45.5 1,976.5
LUKOIL Russia $26.1 475.6
Rosneft Russia $19.1 2,441.3
Norilsk Nickel Russia $13.4 809.2
Evraz Russia $7.4 215.0
Novatek Russia $5.2 73.0
VTB Russia $3.8 753.2
Samsung Electronics South Korea $3.1 9.5
Severstal Russia $3.0 236.2
Uralkali Russia $3.0 143.8
Source: BNY Mellon and various stock exchanges. All figures as of June 30, 2010.
Most Active OTC-Traded Depositary Receipts - by Value
Value Volume Company Country (mm) (mm)
Nestlé Switzerland $3,740.8 77.7
Roche Switzerland $1,830.0 46.2
Nintendo Japan $1,353.7 36.3
Gazprom Russia $985.1 43.2
Anglo American U.K. $849.3 42.6
LUKOIL Russia $803.5 14.7
BASF Germany $767.8 13.2
Allianz Germany $730.9 66.2
E.ON Germany $645.7 19.3
Bayer Germany $634.4 10.1
IOB-Traded Depositary Receipt Trading ValueBy Country, 1H ‘10 (bb)
Val
ue (
$bb
)
Vol
ume
(bb)
Depositary Receipt TradingIOB-Traded, 1H ‘10
Depositary Receipt TradingOTC-Traded, 1H ‘10
OTC-Traded Depositary Receipt Trading ValueBy Country, 1H ‘10 (bb)
$132.4
$6.5
$3.6$3.6 $3.5 $2.8
Russia
Luxembourg
Egypt
India
South Korea
Others
0
100
200
300
400
500
600
'01 '02 '03 '04 '05 '06 '07 '08 '09 1H ‘10*
0
5
10
15
0
40
80
120
'01 '02 '03 '04 '05 '06 '07 '08 '09 1H ‘10*
0
2
4
6
$6.1
$5.5
$4.2
$3.2$2.4
$15.0
Switzerland
UK
Germany
France
Russia
Others
* Note: 2010 represents half-year figures. * Note: 2010 represents half-year figures.
Val
ue (
$bb
)
Vol
ume
(bb)
6
During the first six months of the year, 44 initial and follow-
on DR offerings by non-U.S. companies raised more than $4.1
billion. Issuers from India and China completed the most
offerings, with 21 and 13, respectively. Issuers from these two
countries raised nearly $2.4 billion, more than 50% of the global
total. Of the 44 initial and follow-on DR offerings, 16 issuers
raised capital in U.S. markets, while 20 occurred on European
markets, namely the London and Luxembourg Stock Exchanges.
Brazil’s Gafisa, Kazakhstan’s Alliance Bank and India’s Essar Oil
undertook the top three DR capital-raising transactions during
the first half of 2010.
Depositary Receipt Capital Raisings
Source: BNY Mellon and various stock exchanges. All figures as of June 30, 2010.
Depositary Receipt Capital Raisings By Exchange, 1H ‘10 (bb)
GDRs
ADRs
Annual Depositary Receipt Capital RaisingsPrimary & Follow-on Offerings ($bb)
$1.5
$0.7$0.5
$1.4 NYSE
NASDAQ
Luxembourg
Other 0
10
20
30
40
50
60
'01 '02 '03 '04 '05 '06 '07 '08 '09 1H ‘10*
* Note: 2010 represents half-year figures.
Largest DR Capital Raisings - by Value
Offering DRs DR Value Company Country DR Exchange Date Price (mm) (mm)
Gafisa Brazil NYSE March 25 $14.0 37.0 $519.1
Alliance Bank Kazakhstan None March 19 $11.3 31.2 $352.1
Essar Oil India None April 27 $483.3 0.6 $293.3
Mechel Steel Russia NYSE May 12 $7.5 33.5 $251.1
CTrip.com China NASDAQ March 9 $36 6.6 $236.0
Essar Oil India None May 28 $482.9 0.5 $225.0
AvangardCo Investments Ukraine LSE May 5 $15.0 14.4 $215.6
Trina Solar China NYSE March 19 $20.3 9.1 $184.0
Rusal Russia NYSE Euronext-Paris January 25 $28.1 6.3 $177.4
Mindray Medical China NYSE March 9 $38.2 4.6 $175.7
India and China Lead New DR Capital Raisings
7
Depositary Receipt Institutional Demand
U.S. Holdings of Foreign Equities U.S. Investment in Foreign EquitiesNet Purchases, ($bb)
Val
ue (
$tn)
% o
f Por
tfol
io
0
1
2
3
4
5
'01 '02 '03 '04 '05 '06 '07 '08 '09 1Q '10
0
5
10
15
20
25
30
0
50
100
150
200
'01 '02 '03 '04 '05 '06 '07 '08 '09 1Q ‘10
Largest Depositary Receipt Investors
1H ‘10 DR 1H ‘09 DR Total Equity Investment Equity Portfolio DR Value as a Investor Value (mm) Value (mm) Assets (mm) Style Turnover (%) % of Total Equity
Fidelity Management & Research $30,369 $18,930 $528,996 Growth 38 5.7
BlackRock Fund Advisors (formerly Barclays Global) $21,306 $15,608 $750,794 Index 19 2.8
Dodge & Cox $20,010 $13,265 $108,817 Deep Value 17 18.4
Capital Research Global Investors (U.S.) $18,853 $11,484 $385,585 GARP 27 4.9
Wellington Management Company $16,710 $12,368 $266,515 Value 46 6.3
Capital World Investors (U.S.) $15,644 $13,498 $377,625 Value 28 4.1
Fisher Asset Management $12,316 $7,950 $33,259 GARP 11 37.0
BlackRock Investment Management (U.K.) $12,301 $7,402 $206,556 Growth 53 6.0
T. Rowe Price Associates $10,703 $8,403 $264,812 Growth 30 4.0
Lazard Asset Management (U.S.) $8,845 $6,312 $54,342 Value 45 16.3
As of March 31, 2010, according to statistics released in June by
the U.S. Federal Reserve, the total amount of U.S. investment in
equities increased 51.4% year-on-year to approximately $21.2
trillion, while the value of U.S. investment in non-U.S. equities
(both DRs and non-U.S. shares) increased 68% to about $4.2
trillion. Non-U.S. equities accounted for 19.8% of all U.S. equity
investment, an increase from 18.4% at the same time last year.
U.S. and global institutional demand continued to drive
increases in DR trading volume during the first half of 2010. The
year’s ten largest DR investors, according to analysis provided
by Ipreo Holdings LLC, held DRs valued at $167 billion at the
mid-year mark, an increase of 43.3% year-on-year.
Fidelity Management & Research remained the largest DR
institutional investor as measured by DR value, at just over $30
billion, with DRs accounting for 5.7% of total equity in its global
portfolio. Fisher Asset Management was the institution with the
largest value of DRs as a percent of total equity at 37%.
Total Value of U.S. Investment in Non-U.S. Equity Up 68% Year-Over-Year
Source: U.S. Federal Reserve as of June 10, 2010. Historical figures revised by U.S. Federal Reserve as of June 10, 2010.
8
International Investing Trends
The value of U.S.-listed DRs outstanding totaled $1.65 trillion, a year-over-year increase of 41.0% from mid-year 2009. As reported by
the London Stock Exchange, the value of European-listed DRs outstanding was estimated to be $152.4 billion, and the value of over-
the-counter-traded and other DRs outstanding was estimated to be $36.4 billion.
At the mid-year mark, BP was the largest DR program, with a DR investment value of nearly $49.8 billion. Israel’s Teva Pharmaceutical
came in second with $45.6 billion. Of the top 10, six were oil and gas producers, six listed on the NYSE, two on NASDAQ, and two—
Russian oil and gas producers Gazprom and LUKOIL—traded on the LSE and the OTC markets. Of the top 10 issuers, three were from
the U.K., three from Brazil, and two from Russia, while the remaining two originated from Israel and Mexico.
Value of Outstanding Depositary ReceiptsBy Market, 1H ‘10 (bb)
Value of Outstanding Depositary ReceiptsBy Region, 1H ‘10 (bb)
$763.0
$220.0
$114.1
U.S.-Listed
European-Listed
OTC-Traded/Other
$175.8
$345.7
$234.1
$341.5
Asia-Pacific
EEMEA
Latin America
Western Europe
Largest Depositary Receipt Programs - by Value
Value of Outstanding Mkt. Cap. % of Total
Company Country DR Exchange Sector DRs (bb)* (bb) Mkt. Cap.
BP U.K. NYSE Oil & Gas Producers $49.8 $121.8 40.9
Teva Pharmaceutical Israel NASDAQ Pharmaceuticals & Biotech. $45.6 $52.1 87.5
Gazprom Russia OTC & LSE Oil & Gas Producers $33.8 $123.7 27.3
LUKOIL Russia OTC & LSE Oil & Gas Producers $32.6 $45.2 72.1
Petroleo Brasileiro – Common Brazil NYSE Oil & Gas Producers $29.0 $146.7 19.8
América Móvil - Series L Mexico NYSE Mobile Telecom. $28.6 $100.4 28.5
Petroleo Brasileiro - Preferred Brazil NYSE Oil & Gas Producers $25.8 $146.7 17.6
Vale – Common Brazil NYSE Industrial Metals & Mining $23.3 $126.8 18.4
Royal Dutch Shell - A Shares U.K. NYSE Oil & Gas Producers $20.1 $168.0 12.0
Vodafone Group U.K. NASDAQ Mobile Telecom. $16.8 $119.0 14.1
Source: BNY Mellon, other depositaries and various stock exchange. All data as of June 30, 2010.
*Research methodology: Value of outstanding DRs was derived by multiplying DRs outstanding by DR price. All DR price figures are publicly available from the applicable stock exchanges or trading markets. The number of DRs outstanding for issues sponsored by BNY Mellon was derived from internal reporting sources. The number of DRs outstanding for non-BNY Mellon-sponsored U.S.-listed issues was derived from publicly available figures provided by the NYSE and NASDAQ. DRs outstanding from European-listed and OTC-traded issues that are not BNY Mellon-sponsored were estimated using publicly available information including, but not limited to, company reports and SEC 13-F shareholder data.
9
During the first half of 2010, overall DR performance, as
evidenced by The BNY Mellon ADR Index, was broadly lower.
On June 30, 2010, the Composite ADR Index closed at 152.86,
down 15.76% year-to-date, while still managing a 4.71% gain
year-on-year. At the mid-year mark, the Composite ADR Index
had 345 constituents and a free-float market capitalization, as
defined by CME Group Index Service, in excess of $4.1 trillion.
Thirty of the 35 country indices were down year-to-date,
while the India Select DR Index and New Frontier DR Index led
gainers with returns of 3.60% and 1.81%, respectively, year-
to-date. China’s Baidu was again one of the half-year’s best-
performing ADR Index constituents, returning 65.56%. Other
top-performing index constituents included Internet Initiative of
Japan, up 60.84%, and the U.K.’s Trintech Group, up 52.47%.
Demand for more exchange-traded funds (ETFs) based on
DRs was evidenced by the creation of The BMO China Equity
Hedged to CAD Index ETF, which tracks The BNY Mellon China
Select ADR Index CAD Hedged, and The BMO India Equity
Hedged to CAD Index ETF, which tracks The BNY Mellon India
Select DR Index CAD Hedged.
Top Index Performance
BNY Mellon ADR Indices YTD Close % Change BNY Mellon Latin Telecom ADR Index 274.2 -5.7
BNY Mellon Asia ADR Index 113.7 -10.9
BNY Mellon Emerging Markets ADR Index 279.8 -11.2
BNY Mellon Latin America ADR Index 332.9 -15.6
BNY Mellon ADR Index 113.0 -17.1
BNY Mellon Developed Markets ADR Index 79.6 -18.8
Major Global Market Indices YTD Close % Change MSCI BRIC Index 300.19 -9.66
MSCI EAFE 1348.11 -14.72
MSCI AC World Index ex USA 212.76 -12.41
MSCI AC Europe 327.81 -18.08
MSCI AC Asia-Pacific 112.80 -6.36
MSCI EM Latin America 3639.55 -11.59
MSCI Emerging Markets 917.99 -7.22
S&P 500 Index 1030.71 -7.57
Dow Jones Industrial Average 9774.02 -6.27
Top Country Index Performance YTD Close % Change
BNY Mellon Denmark ADR Index 544.5 26.3
BNY Mellon Sweden ADR Index 101.4 19.9
BNY Mellon Colombia ADR Index 214.6 15.3
BNY Mellon Peru ADR Index 391.6 14.9
BNY Mellon India ADR Index 1060.6 2.6
Top Constituent Performance YTD Country % Change
Baidu China 65.6
Internet Initiative of Japan Japan 60.8
Trintech Group Ireland 52.6
Silicon Motion Technology Taiwan 51.6
Spreadtrum Communications China 50.9
Trinity Biotech Ireland 50.5
ARM Holdings U.K. 44.9
China Southern Airlines China 34.2
ICON Ireland 32.9
CNinsure China 29.2
The BNY Mellon Depositary Receipt Indices
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
'06J A J O '07J A J O '08J A J O '09J A J O '10J A
BNY Mellon Composite IndexBNY Mellon Developed Markets Index BNY Mellon Emerging Markets IndexMSCI EAFE IndexS&P 500
Annual Index Return
As the only real-time index to track all DRs, New York Shares and global registered shares traded on the NYSE, NYSE Amex and NASDAQ, The BNY Mellon ADR Index has become a widely followed international benchmark.
Raw data for the BNY Mellon ADR Index is provided by Dow Jones & Company, Inc
Source: BNY Mellon and Bloomberg. Data as of June 30, 2010.
10
BNY Mellon’s Depositary Receipt Leadership
During the first six months of 2010, BNY Mellon grew its
depositary leadership position across many metrics, acting
for 59% of all new sponsored DR programs and 83% of all DR
capital-raising transactions. BNY Mellon acts as depositary for
63% of all sponsored DR programs globally.
BNY Mellon’s DR Expertise: Solving Complex Problems for Our Clients
VimpelCom Case Study: An Intricate Exchange Offer Resulting from a Telecom Merger
In April, mobile phone providers VimpelCom and Kyivstar merged to create VimpelCom Limited. BNY Mellon used its
expertise to undertake this complex corporate action, handling the details of the exchange offer in both the U.S. and
Russian markets. As a result of the merger, 1.1 billion new VimpelCom DRs were introduced to the market.
On the Russian side of the exchange offer, BNY Mellon met a set of extensive regulatory requirements and complied
with strict timing: the U.S. offer had to close three days before the Russian offering. BNY Mellon obtained pre-approval
as a Qualified Investor under Russian regulations. VimpleCom’s registrar required BNY Mellon’s custodian bank to
complete a pre-clearance and pre-approval process to obtain share acceptance forms. In addition to providing a
certified financial statement, BNY Mellon established a special custodian account and submitted a tender application to
the custodian.
After the merger, VimpelCom Ltd. established two NYSE-listed American Depositary Receipt (ADR) programs with BNY
Mellon as sponsored depositary bank: VimpelCom Ltd. common and VimpelCom Ltd. preferred.
The success of this merger was in part due to BNY Mellon’s superior expertise and experience in handling complex
corporate actions and its proficiency in meeting challenging international regulatory requirements and deadlines, while
satisfying the needs of the many parties involved in a cross-border corporate action.
Total Sponsored Depositary ReceiptsNumber of DR Programs
0
500
1,000
1,500
2,000
2,500
'01 '02 '03 '04 '05 '06 '07 '08 09 1H ‘10*
BNY Mellon JPMorgan Chase Citibank Deutsche Bank
* Note: 2010 represents half-year figures.
BNY Mellon partnered with DR issuers on several major
international corporate events, including Russia’s VimpelCom;
a detailed case study is below. BNY Mellon also assisted
in structuring a complex IPO for Rusal, establishing several
new procedures for securities settlement in Europe. Rusal
became the first Russia-based company to list its local shares
on the Hong Kong Stock Exchange and its GDRs on the NYSE
Euronext-Paris.
BNY Mellon also supported Mexico’s Telmex Internacional
transaction, launched in January, when América Móvil
announced a tender offer for shares and DRs of Telmex
Internacional. In May, BNY Mellon was appointed as tender
and exchange agent by América Móvil. In June, after the $5.5
billion transaction closed, BNY Mellon was appointed successor
depositary for the Telmex Internacional “L” and “A” share
programs.
Source: BNY Mellon. Data as of June 30, 2010.
Sponsored DRs
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BNY Mellon’s Tradition of DR Innovation
Standard Chartered Indian Depositary Receipts – An Industry First
Indian Depositary Receipts (IDRs) are the newest addition to the family of depositary receipt products, which for
many years have acted as the most widely accepted mechanism for listing securities internationally. The use of IDRs
marks an important stage in the development of the DR instrument as the most efficient and effective settlement
mechanism to facilitate cross-border investment.
In June 2010, the U.K.’s Standard Chartered became the first company to list an Indian depositary receipt program in
India and the first non-Indian company to sell shares (in the form of IDRs) directly to Indian investors.
The introduction of Indian depositary receipts is yet another example of BNY Mellon’s industry-leading advisory
capabilities. Transactions like this show our continued support for our issuers throughout the world and solidify
our position as the market leader in depositary receipts. Our focus on financial markets innovation drives product
development and facilitates superior service solutions for our clients by connecting them to global financial markets.
At the Forefront of Innovation: Developing New Ways To Benefit Our Clients
BNY Mellon Launches the First Actively Managed International ETF (NYSE Symbol: AADR)
BNY Mellon, in conjunction with two leaders in the investment community—AdvisorShares and WCM Investment
Management—created the first international actively managed exchange-traded fund (ETF). The ETF trades on the
New York Stock Exchange under the symbol AADR.
WCM Investment Management, a fund manager with over 20 years of experience, selects securities for the fund
pursuant to an “active” management strategy for portfolio construction. The Fund’s investment objective, as stated
in its prospectus (see: http://aadr.advisorshares.com) is long-term capital appreciation greater than international
benchmarks, such as the MSCI EAFE Index and the BNY Mellon Classic ADR Index, which is the fund’s primary
benchmark.
This innovative product demonstrates our continued support and commitment to issuers, market intermediaries and
investors in the hopes of creating a more liquid depositary receipt market.
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BNY Mellon Depositary Receipt Contacts
London
Michael Cole-Fontayn, EVPCEO - DR DivisionPhone: +44 207 964 [email protected]
New York
Nuno da Silva, MD Latin AmericaPhone: +1 212 815 2233 [email protected]
Marianne Erlandsen, MDWestern Europe Phone: +1 212 815 [email protected]
Michael Finck, MDTransactions and Corporate Actions Phone: +1 212 815 [email protected]
Chris Kearns, MD Product ManagementPhone: +1 212 298 1240 [email protected]
Anthony Moro, MD Emerging Europe and Africa Phone: +1 212 815 5838 [email protected]
Mahmoud Salem, MDMiddle East Phone: +1 212 815 2248 [email protected]
Dave Stueber, MD Global Business Development Phone: +1 212 815 2981 [email protected]
Asia-Pacific
BeijingKathy Jiang, VPPhone: +86 10 8800 [email protected]
Hong KongGregory Roath, MDAsia-PacificPhone: +852 2840 [email protected]
Melbourne Gary Peck, MDPhone: +61 3 9640 [email protected]
MumbaiAparna Salunke, VP Phone: +91 22 3028 2312 [email protected]
SeoulSean Lim, VPPhone: +82 2 399 0040 [email protected]
ShanghaiCaleb Shih, VP Phone: +86 21 5888 2919 [email protected]
TaipeiFrances Ni, VP Phone: +886 2 2711 0995 [email protected]
TokyoKainoshin Hara, MD Phone: +81 3 3595 1071 [email protected]
Emerging Europe, Middle East and Africa
BeirutBana Akkad Azhari, VP Phone: +961 1 988 788 [email protected]
CairoTarek El-Refai, MDPhone: +202 333 [email protected]
DubaiPeter Gotke, VPPhone: +971 4425 [email protected]
IstanbulMichel Sidier, MDPhone: +90 212 259 [email protected]
MoscowIrina Baichorova, VP Phone: +7 495 967 3110 [email protected] Latin America
Buenos Aires Ciro Ortiz, VPPhone: +54 11 4345 [email protected]
Mexico CityPaulina Trueba, VPPhone: +52 55 3544 [email protected]
São PauloCurtis Smith, VPPhone: +55 11 3050 [email protected]
Western Europe
London James Green, MD Secondary Market Solutions Phone: +44 207 964 6080 [email protected]
FrankfurtRainer Wunderlin, MDPhone: +49 69 9715 [email protected]
MilanAdriana Pierelli, VP Phone: +39-02 879 0923 [email protected]
ParisBenjamin Brisedou, VPPhone: +33 1 4297 [email protected]
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BNY Mellon is the corporate brand of BNY Mellon Corporation and may also be used as a generic term to reference the corporation as a whole or its various subsidiaries. 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. BNY Mellon 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 $22.4 trillion in assets under custody and administration, $1.1 trillion in assets under management, services $12 trillion in outstanding debt, and processes global payments averaging $1.5 trillion per day. Additional information is available at bnymellon.com.
This information and data are provided for general informational purposes only. BNY Mellon does not warrant or guarantee the accuracy or completeness of, nor undertake to update or amend, this information or data. We provide 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.
Members FDIC. ©2010 BNY Mellon Corporation. Services provided by BNY Mellon and its various subsidiaries. All rights reserved.
Depositary Receipts: NOT FDIC, STATE OR FEDERAL AGENCY INSURED. MAY LOSE VALUE.NO BANK, STATE OR FEDERAL AGENCY GUARANTEE.