[2] Depositary Receipts: Citibank 1999 Year-End Review.NEW YORK--(BUSINESS WIRE)--Dec. 16, 1999-- This is Citibank's annual year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. research report on the ADR ADR - Astra Digital Radio market. Numbers reflecting total value of capital raised were formulated for·mu·late tr.v. for·mu·lat·ed, for·mu·lat·ing, for·mu·lates 1. a. To state as or reduce to a formula. b. To express in systematic terms or concepts. c. from shared information with other depositaries. Impressive growth for the Depositary Receipts depositary receipt A negotiable certificate that represents a company's publicly traded debt or equity. Depositary receipts are created when a company's shares or bonds are delivered to a depositary's custodian bank, which instructs the depositary to issue industry throughout the `90s continues as the decade draws to a close, with capital raised using ADRs growing to more than $21.2 billion in 1999, breaking the all-time all-time adj. Exceeding all others up to the present time: an all-time speed skating record. all-time Adjective Informal record of $19.5 billion set in 1996. The year's total more than doubled 1998's year-end tally of $9.6 billion. Helping to fuel the continuation of this growth was a 215 percent increase over 1998 in capital raised by emerging markets companies using ADRs, to $12.7 billion, up from $4.0 billion in the previous year. This year's emerging markets number represents 60 percent of total capital raised during the year, compared to a 42 percent share of 1998's year-end total.
Capital Raising Comparison, Emerging vs. Developed Markets
Capital Raised in DR Form US$millions YOY
Region 1998 1999YTD %Chg
Emerging Markets 4,034.5 12,712.5 215.1%
Developed Markets 5,604.7 8,509.3 51.8%
Global Total 9,639.2 21,221.8 120.2%
No. of Capital Raisings YOY
Region 1998 1999YTD %Chg
Emerging Markets 48 51 6.3%
Developed Markets 47 49 4.3%
Global Total 95 100 5.3%
Source:
Citibank and other depositaries
Capital Raising Comparison, Regional Analysis
Capital Raised in DR Form US$millions YOY
Region 1998 1999YTD %Chg
Western Europe 5,322.5 7,450.7 40.0%
Central & Eastern
Europe 1,482.6 1,569.7 5.9%
Total Europe 6,805.1 9,020.4 32.6%
Developed Asia 1,266.5 1,750.1 38.2%
Emerging Asia 1,054.4 9,765.7 826.2%
Total Asia/Pacific 2,320.9 11,515.9 396.2%
Latin America 74.1 467.5 530.9%
African Continent 439.0 218.1 -50.3%
Global Total 9,639.2 21,221.9 120.2%
-0-
No. of Capital Raisings YOY
Region 1998 1999YTD %Chg
Western Europe 47 43 -8.5%
Central & Eastern
Europe 20 11 -45.0%
Total Europe 67 54 -19.4%
Developed Asia 7 11 57.1%
Emerging Asia 11 26 136.4%
Total Asia/Pacific 18 37 105.6%
Latin America 1 6 500.0%
African Continent 9 3 -66.7%
Global Total 95 100 5.3%
Source: Citibank and other depositaries
Capital Raising Comparison Regional Shares & Average Deal Size
Regional Shares YOY Average YOY
Deal Size$MM
-------------------------------------------
Region 1998 1999 YTD % Chg 1998 1999YTD % Chg
----------------------------------------------------------------------
Western Europe 55.2% 35.1% -20.1% 113 173 53.0%
Central & Eastern Europe 15.4% 7.4% -8.0% 74 143 92.5%
----------------------------------------------------------------------
Total Europe 70.6% 42.5% -28.1% 102 167 64.5%
----------------------------------------------------------------------
Developed Asia 13.1% 8.2% -4.9% 181 159 -12.1%
Emerging Asia 10.9% 46.0% 35.1% 96 376 291.8%
----------------------------------------------------------------------
Total Asia/Pacific 24.1% 54.3% 30.2% 129 311 141.4%
----------------------------------------------------------------------
Latin America 0.8% 2.2% 1.4% 74 78 5.1%
African Continent 4.6% 1.0% -3.5% 49 73 49.1%
----------------------------------------------------------------------
Global Total 100.0% 100.0% 101 212 109.2%
Source: Citibank and other depositaries.
Illustrating the effect that dynamic worldwide economic growth is having on the ADR market -- and underscoring the pronounced shift in U.S. investor sentiment towards overseas equities -- five out the top 10 ADR capital raisings in 1999 were from Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. alone, including Korea Telecom's $2.5 billion offering, the largest in history.
1999 Top 10 Capital Raisings Utilizing Depositary Receipts YTD
Depositary Structure
Country Eff. Date
------------------------------------------------------------------------
Korea Telecom Corporation Korea Citibank 5/26/99 ADR
EQUANT N.V. Netherlands Morgan 12/8/99 ADR
Pohang Iron & Steel
Co., Ltd.(POSCO) Korea BoNY 7/13/99 ADR
EQUANT N.V. Netherlands Morgan 2/17/99 ADR
Hanvit Bank Korea BoNY 8/2/99 GDR
STMicroelectronics N.V. France BoNY 9/16/99 ADR
Korea Electric Power
Corporation (KEPCO) Korea BoNY 3/24/99 ADR
Partner Communications
Company Ltd. Israel Morgan 11/1/99 ADR
Hyundai Motor Company Korea Citibank 9/22/99 GDR
Hon Hai Precision Industry Co., Ltd. Taiwan Citibank 10/7/99 GDR
Total
Lead Manager Capital
Raised
Exchange via DRs
Where DR $U.S.
Listed millions
---------------------------------------------------------------------
Korea Telecom Corporation Morgan Stanley Dean Witter NYSE 2,485.7
EQUANT N.V. Morgan Stanley Dean Witter NYSE 1,371.3
Pohang Iron & Steel
Co., Ltd.(POSCO) Salomon Smith Barney NYSE 1,011.1
EQUANT N.V. Morgan Stanley Dean Witter NYSE 1,003.1
Hanvit Bank Lehman Bros PORTAL 999.8
STMicroelectronics N.V. Morgan Stanley Dean Witter NYSE 889.6
Korea Electric Power
Corporation (KEPCO) Morgan Stanley Dean Witter NYSE 753.6
Partner Communications
Company Ltd. Morgan Stanley Dean Witter NASDAQ 603.7
Hyundai Motor Company CS First Boston PORTAL 500.0
Hon Hai Precision
Industry Co., Ltd. Warburg Dillon Read PORTAL 416.7
10,034.6
Source: Citibank and other depositaries.
Trading generated by the 1999 ADR boom is projected to reach $630 billion, 14 percent over 1998, despite marked downturns in the Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of (Telebras demerger demerger n (Comm) → Abspaltung f, Demerger m , Brazilian real The real (IPA: [xe'aw] or [ʁe'aɫ], symbol: R$, ISO 4217 code: BRL, plural: reais) is the currency of Brazil. It is also the name of the earliest Brazilian currency (see from the Colonial period to 1942. devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. ) and Central/Eastern European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. (Russia Russia, officially the Russian Federation, Rus. Rossiya, republic (2005 est. pop. 143,420,000), 6,591,100 sq mi (17,070,949 sq km). , Balkan Bal·kan adj. 1. Of or relating to the Balkan Peninsula or the Balkan Mountains. 2. Of or relating to the Balkan States or their inhabitants. pl.n. Balkans The Balkan States. war) markets. Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). (telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , energy sectors), the Asia/Pacific region (Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan , Korea, Japan), and Africa (gold mining sector) fueled most of the growth, registering increases ranging from 33 percent to 56 percent. The directional In one direction. Contrast with omnidirectional. changes in ADR trading values mirror the performance of the regional MSCI stock market indices Commonly used stock market indices include: Global Large companies not ordered by any nation or type of business (in alphabetical order).
 r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). declined by 29
percent. The MSCI index for Western Europe grew by one percent.(1) Morgan Stanley Capital International Morgan Stanley Capital International (MSCI) This firm publishes a number of well known benchmarks, such as the MSCI World Index.
Trading Volume Comparison
1998 Volumes Millions 1999 Volumes(a) Millions
Region Shares Traded US$ Value Shares Traded US$ Value
Western Europe 8,490.2 328,756.9 8,723.9 437,230.9
Central &
Eastern Europe 331.8 8,962.5 326.0 7,058.1
Total Europe 8,822.0 337,719.4 9,049.9 444,288.9
Developed Asia 1,177.6 24,695.2 1,199.3 32,556.7
Emerging Asia 999.4 12,490.3 1,201.1 25,592.0
Total
Asia/Pacific 2,177.1 37,185.5 2,400.4 58,148.7
Latin America 4,423.0 172,240.4 4,418.5 122,338.7
African
Continent 373.2 4,303.8 457.8 5,054.4
Global Totals: 15,795.3 551,449.0 16,326.7 629,830.8
Year-on-Year Change MSCI US$ Index Returns
Shares Traded US$Value June 5, 1998 -
Region Oct. 29, 1999
Shares Traded US$ Value June 5, 1998 - Dec 3,
1999
Western Europe 2.8% 33.0%
Central &
Eastern Europe -1.8% -21.2% -28.8%
Total Europe 2.6% 31.6% 0.8%
Developed Asia 1.8% 31.8%
Emerging Asia 20.2% 104.9%
Total
Asia/Pacific 10.3% 56.4% 56.7%
Latin America -0.1% -29.0% -11.4%
4.9%
African
Continent 22.7% 17.4%
Global Totals: 3.4% 14.2% 14.1%
Sources: NYSE, NASDAQ, AMEX, MSCI, Bloomberg Financial Markets
(a) October 1999 YTD Projected
1999 Projected ADR US$ Value of Trading, Top 10 Issues
October 1999 YTD Projected Volumes
Sponsored
Issuer Name Country Depositary
Nokia Corporation Finland Citibank
Vodafone AirTouch plc U.K. BoNY
BP Amoco plc U.K. Morgan
Telebras Holding Company Depositary Receipts Brazil BoNY
LM Ericsson Telephone Co. Sweden Citibank
Royal Dutch Petroleum Company N.V. Netherlands Morgan
Telefonos de Mexico S.A. de C.V. Mexico Morgan
Elan Corp plc Ireland BoNY
ASM Lithography Holding, NV Netherlands Morgan
Koninklijke Philips Electronics N.V. Netherlands Citibank
Exchange
Where DR
Issuer Name Structure Listed
Nokia Corporation ADR NYSE
Vodafone AirTouch plc ADR NYSE
BP Amoco plc ADR NYSE
Telebras Holding Company Depositary Receipts ADR NYSE
LM Ericsson Telephone Co. ADR NASDAQ
Royal Dutch Petroleum Company N.V. ADR-NY Reg Shs NYSE
Telefonos de Mexico S.A. de C.V. ADR NYSE
Elan Corp plc ADR NYSE
ASM Lithography Holding, NV ADR-NY Reg Shs NASDAQ
Koninklijke Philips Electronics N.V. ADR-NY Reg Shs NYSE
1999
US$
Exchg Millions
Ticker Value of
Issuer Name SYMBOL Trading
Nokia Corporation NOK 58,338.6
Vodafone AirTouch plc VOD 49,693.3
BP Amoco plc BPA 44,406.5
Telebras Holding Company Depositary Receipts TBH 36,612.9
LM Ericsson Telephone Co. ERICY 34,038.4
Royal Dutch Petroleum Company N.V. RD 32,279.4
Telefonos de Mexico S.A. de C.V. TMX 25,946.8
Elan Corp plc ELN 15,865.2
ASM Lithography Holding, NV ASML 13,409.2
Koninklijke Philips Electronics N.V. PHG 11,976.5
1999 Projected ADR Shares Traded Top 10 Issues, October 1999 YTD
Projected Volumes
Sponsored
Issuer Name Country Depositary Structure
LM Ericsson
Telephone Co. Sweden Citibank ADR
Royal Dutch Petroleum
Company N.V. Netherlands Morgan ADR-NY Reg Shs
Nokia Corporation Finland Citibank ADR
Telebras Holding
Company Depositary
Receipts Brazil BoNY ADR
BP Amoco plc U.K. Morgan ADR
Telefonos de Mexico
S.A. de C.V. Mexico Morgan ADR
Elan Corp plc Ireland BoNY ADR
Vodafone AirTouch plc U.K. BoNY ADR
ASM Lithography
Holding, NV Netherlands Morgan ADR-NY Reg Shs
YPF Sociedad Anonima Argentina BoNY ADR
1999
Exchange Exchg Shares
Where DR Ticker Traded
Issuer Name Listed SYMBOL Millions
LM Ericsson
Telephone Co. NASDAQ ERICY 1,192.3
Royal Dutch Petroleum
Company N.V. NYSE RD 582.3
Nokia Corporation NYSE NOK 573.4
Telebras Holding
Company Depositary
Receipts NYSE TBH 466.9
BP Amoco plc NYSE BPA 462.4
Telefonos de Mexico
S.A. de C.V. NYSE TMX 370.1
Elan Corp plc NYSE ELN 363.2
Vodafone AirTouch plc NYSE VOD 331.5
ASM Lithography
Holding, NV NASDAQ ASML 274.4
YPF Sociedad Anonima NYSE YPF 267.0
Sources: NYSE, NASDAQ, AMEX, Bloomberg Financial Markets
Trends Are Favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. for Continued Business Expansion Key indicators -- real GDP Real GDP This inflation-adjusted measure that reflects the value of all goods and services produced in a given year, expressed in base-year prices. Often referred to as "constant-price", "inflation-corrected" GDP or "constant dollar GDP". growth and accelerating globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation of mutual fund assets Fund assets The total value of a portfolio's securities, cash, and other holdings, minus any outstanding debts. -- point to sustained increases in cross-border investing and the ADR business in the early years of the new millennium. A worldwide overview of real GDP growth projections for 2000 builds a powerful case for growth of U.S. investment in non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. companies. Although real U.S. GDP GDP (guanosine diphosphate): see guanine. growth is expected to decline moderately from 3.8 percent in 1999 to 3.1 percent in 2000 due to higher interest rates and a general domestic economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. (1), foreign market economies are recovering. Real GDP growth is expected to rise from 2.0 percent to 2.8 percent for Western Europe in 2000, with Latin American real GDP growth projected to rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective from -0.5 percent in 1999 to 3.2 percent by year end 2000. Overall economic growth in the Asia/Pacific region is expected to essentially hold steady, declining from 2.5 percent in 1999 to 2.3 percent in 2000. While Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. is anticipated to experience a surge from 2.9 percent this year to 4.6 percent in 2000, overall growth in the region is tempered by uncertainty about the near term outlook for Japan. Trends in mutual fund assets further emphasize U.S. investors' continued move into non-U.S. securities. Through October 1999, total international and global (excluding U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ) equity mutual fund assets have increased by 21 percent to $370 billion from $307 billion(2). Also demonstrating a clear shift in U.S. investor sentiment toward non-U.S. equities, net positive new cash inflows increased between July July: see month. and October, from -$3.2 billion in July, to $0.8 billion in August, $1.7 billion in September September: see month. , and $3.8 billion in October. (1) Consensus Economic Forecasts, Nov, 1999 (2) Investment Company Institute The Uplift Effect: ADRs Outperformed the U.S. Market A Citibank study demonstrates a remarkable mutual "uplift" effect on the U.S. dollar price appreciation performance of ADRs and ordinary shares, illustrating the advantages of a cross-border listing using ADRs. The effect occurred regardless of whether the U.S. or the local market was the better performer, creating a "win-win" situation for both investors and issuers. The study analyzed an·a·lyze tr.v. an·a·lyzed, an·a·lyz·ing, an·a·lyz·es 1. To examine methodically by separating into parts and studying their interrelations. 2. Chemistry To make a chemical analysis of. 3. the December 9, 1999 year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. price appreciation performance of the 100 most liquid ADRs as measured by their aggregate 1991-1999 U.S. dollar value of trading. These 100 ADRs, representing 30 countries, accounted for more than 90 percent of the total ADR trading value for the period. Overall, the average year-to-date ADR return was 48.4 percent, compared to the S&P 500's 14.6 percent. The issuers' ADRs outperformed the U.S. market 64 percent of the time. The average ordinary share return was 50.8 percent, compared to an average MSCI local index return of 24.2 percent. The ordinary shares outperformed the local market 58 percent of the time. When the local market outperformed market outperform An analyst recommendation that a stock is expected to outperform the overall market. the U.S. market, the average ADR return was 65.2 percent, compared to 14.6 percent for the S&P 500 index. The issuers' ADRs, uplifted up·lift tr.v. up·lift·ed, up·lift·ing, up·lifts 1. To raise; elevate. 2. To raise to a higher social, intellectual, or moral level or condition. 3. by the higher performing local market, outperformed the U.S. market 75 percent of the time. The average ordinary share return was 69.3 percent, compared to an average MSCI local index return of 47.1 percent. The uplifted ordinary shares outperformed their local markets 54 percent of the time. When the U.S. market outperformed the local market, the average ordinary share return was 33.7 percent, compared to an average MSCI local index return of 3.1 percent. The issuers' ordinary shares were uplifted by the higher performing U.S. market and outperformed the local market 62 percent of the time. The average ADR return was 32.8 percent, compared to the S&P 500's 14.6 percent. The uplifted ADRs outperformed the U.S. market 54 percent of the time. The above information is being provided solely for information purposes by Citibank, N.A. It does not constitute a recommendation, solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual or offer for the purchase or sale of any securities, nor shall this material be construed in any way as investment or legal advice or a recommendation, reference or endorsement by Citibank, N.A. |
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