Depositary Receipts Show Resiliency in 2009 on Higher Global Trading Volume, Program Establishment, Capital Raisings and Price Returns, According to BNY Mellon Year-End Industry Report

BNY Mellon ADR Index finishes up 36%, more than 280 new DR programs created worldwide

Jan 13, 2010, 07:35 ET from BNY Mellon

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:


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 GroupTata Steel, Tata Motors and Tata Poweras 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  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

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

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.