Citibank Finds 2001 ADR Activity Mirrors Global Capital Markets, With Strength in Emerging Markets Accelerating Post September 11th.Business Editors NEW YORK--(BUSINESS WIRE)--Dec. 19, 2001 Citibank (NYSE NYSE See: New York Stock Exchange :C): - ADR trading volume rises 6% to a new record of 31 billion shares in 2001, while 37% decline in trading value reflects overall market conditions. - Capital raised using ADRs totaled $8.4 billion, with 73% from emerging markets Citibank today reported that American Depositary Receipt American Depositary Receipt (ADR) Certificates issued by a US depository bank, representing foreign shares held by the bank, usually by a branch or correspondent in the country of issue. (ADR ADR - Astra Digital Radio ) trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. is projected to increase 6% over 2000 to a new record of 31 billion shares (based on November 2001 YTD See Year-to-date. YTD See year to date (YTD). data), but trading value is projected to be $700 billion, down 37% from last year's record levels. By way of comparison, the decline in asset values was 44% for the NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on market, and 29% for the US market without ADRs in the same time period. Capital raised in ADR form by non-US companies was $8.4 billion through December 18th, compared to a record $30 billion in 2000. Emerging markets represented 73% of the $8.4 billion total, with emerging Asia accounting for $4.8 billion and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. for $1.4 billion. Citibank programs represent 53% of all capital raised in 2001, including three out of the top five programs: - Korea Telecom KT (formerly, Korea Telecom, Korean: 한국통신, NYSE: KT) is South Korea's top integrated wired/wireless telecommunication service provider. KT has been Korea's leader in the development of the information & communications business for the last 25 years Corporation - $2.24 billion offering - Hynix Semiconductor - $1.24 billion offering - Petroleo Brasileiro S.A. - Petrobras - $651 million offering. US Investor Behavior Post September 11 Favors Emerging Markets New Citibank analysis reveals that since September 11, US investors in ADRs (exchange listed programs, OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). programs and private placements) have channeled their investments into emerging markets such as Taiwan and Korea. Spreads between the MSCI emerging market indices and the S&P 500 index increased by 4.5% during the 52 trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. after September 11 compared to the 49 trading days prior, showing improved performance of emerging markets relative to the US market. At the same time, the spreads between the MSCI developed market indices and the S&P 500 declined by 2.7%.
US Investors Channeled ADR Funds into Emerging Markets
Before After
Sept. 11 Sept. 11 After vs. After vs.
(49 days) (52 days) Before Before
----------------------------------------------------------
Change in
Spread Inflow Spread Inflow as Change Inflow as
vs. as a % vs. a % of in a % of
S&P 500 of Outflow S&P 500 Outflow Spread Outflow
-------- ---------- -------- --------- ------- ---------
Developed
Markets 0.02% 76% -2.69% 31% -2.71% -44%
Emerging
Markets 0.55% 41% 5.06% 116% 4.51% 75%
-Japan, Hong Kong, Singapore, Australia and New Zealand.
-US markets closed from 9/11 to 9/14/01
Source: Bloomberg Financial Markets and Citibank Analysis
For total emerging markets, Citibank data suggests that cross border inflows into ADRs relative to outflows increased by 75% during the 52 trading days after September 11, compared to the 49 trading days before. This was driven by Asian emerging markets, which showed a 97% increase in inflows over the same period. By contrast, for developed markets there was a 44% decrease in inflows into ADRs relative to outflows. "While overall ADR market activity has been impacted by the global 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. , investor behavior since September 11 shows reason to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about emerging markets, particularly in Asia," said Kurt Schneiber, Global Managing Director, Citibank Depositary Receipt 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 Services. "This underscores the long-term trend of US investors increasing their exposure to non-US equities throughout a wide variety of global events and conditions." According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the US Federal Reserve, during the third quarter 2001 there were net inflows of $2.7 billion into non-US equities (both ADRs and non-US shares) in spite of the sharp drop in equity asset values caused by the events of September 11. US investment in non-US equities declined by 15% during the third quarter from $1.61 trillion One thousand times one billion, which is 1, followed by 12 zeros, or 10 to the 12th power. See space/time. (mathematics) trillion - In Britain, France, and Germany, 10^18 or a million cubed. In the USA and Canada, 10^12. to $1.37 trillion due entirely to the decline in asset values, not net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight . Since 1987, net equity outflows from non-US shares and ADRs occurred in only five of fifty-nine quarters. "The pattern of inflows of non-US securities over time proves that investors in ADRs and non-US shares have maintained a buy-and-hold strategy Buy-and-hold strategy A passive investment strategy with no active buying and selling of stocks from the time the portfolio is created until the end of the investment horizon. Opposite of active strategy. , even through market shocks including September 11. We expect this trend to continue for the long term," said Schneiber.
US Investment in Non-US Equities
(US$ Billions, 4Q1999 - 3Q2001)
Qtr/Year US Investment Quarterly % Change Net Cross- Quarterly
in Non-US Change Border Chg. Due
Equities Capital to Asset
Flows Values
----------------------------------------------------------------------
4Q2000 1,787.0
1Q2001 1,574.0 -213.0 -11.9% 27.3 -240.3
2Q2001 1,610.7 36.7 2.3% 52.2 -15.5
3Q2001 1,368.4 -242.3 -15.0% 2.7 -245.0
Source: US Federal Reserve, "Flow of Funds Accounts of the United
States," Third Quarter 2001, December 7, 2001.
For more information on Citibank's ADR programs, as well as industry trends and developments, please visit www.citibank.com/adr . Citibank Depositary Receipt Services leads the market in bringing quality issuers to the U.S market and promoting American Depositary Receipts as an effective capital markets tool. Citibank began offering ADRs in 1928 and today in the market leader, widely recognized for delivering high quality, highly liquid programs to its customers. Citibank Depositary Receipt Services is a part of Citibank Worldwide Securities Services (WWSS WWSS Worldwide Satellite Systems (US DoD contract vehicle) WWSS Warfare and Warfare Support System ), which serves global issuers, investors and intermediaries through the world's largest and most acclaimed ac·claim v. ac·claimed, ac·claim·ing, ac·claims v.tr. 1. To praise enthusiastically and often publicly; applaud. See Synonyms at praise. 2. proprietary custody and clearing network, spanning 50 countries and territories. It currently provides securities services to more than 2,500 customers worldwide and has $4.7 trillion in assets under custody. WWSS is the industry's premier custodian bailee (custodian) n. a person with whom some article is left, usually pursuant to a contract (called a "contract of bailment"), who is responsible for the safe return of the article to the owner when the contract is fulfilled. of cross-border assets, top-ranked global clearer, and recognized leader in depositary receipt services and agency and trust services. Citigroup (NYSE: C), the preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae global financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. company with some 190 million customer accounts in more than 100 countries, provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney Smith Barney is a division of Citigroup Global Capital Markets Inc., a global, full-service financial firm, that provides brokerage, investment banking and asset management services to corporations, governments and individuals around the world. , Banamex, and Travelers. Additional information may be found at: www.citigroup.com . Visit our web site at www.citibank.com/adr . This 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.
Top 10 ADRs by Shares Traded
(November 2001 YTD)
Volume
Issuer Country Sponsor Exchange Ticker (millions)
LM Ericsson
Telephone Co. Sweden Citibank NASDAQ ERICY 4,272
Nokia Corporation Finland Citibank NYSE NOK 3,358
Vodafone Group plc U.K. BoNY NYSE VOD 1,219
Taiwan Semiconductor
Mfg. (TSMC) Taiwan Citibank NYSE TSM 835
Deutsche Telekom AG Germany Citibank NYSE DT 737
ASML Holding, NV Netherlands Morgan NASDAQ ASML 725
Royal Dutch Petroleum
Company N.V. Netherlands Morgan NYSE RD 610
BP plc U.K. Morgan NYSE BP 552
Telefonos de Mexico
S.A. de C.V. Mexico Morgan NYSE TMX 479
United
Microelectronics
Corp. (UMC) Taiwan Citibank NYSE UMC 472
Sources: NYSE, NASDAQ, Bloomberg Financial Markets
----------------------------
Top 10 ADRs by Trading Value
(November 2001 YTD)
Value (US$
Issuer Country Sponsor Exchange Ticker millions)
Nokia Corporation Finland Citibank NYSE NOK 83,305
Royal Dutch Petroleum
Company N.V. Netherlands Morgan NYSE RD 34,023
Vodafone Group plc U.K. BoNY NYSE VOD 32,170
LM Ericsson
Telephone Co. Sweden Citibank NASDAQ ERICY 27,707
BP plc U.K. Morgan NYSE BP 27,537
Elan Corp plc Ireland BoNY NYSE ELN 20,723
Teva Pharmaceutical
Industries Ltd. Israel BoNY NASDAQ TEVA 18,582
Telefonos de Mexico
S.A. de C.V. Mexico Morgan NYSE TMX 17,280
Deutsche Telekom AG Germany Citibank NYSE DT 17,169
ASML Holding, NV Netherlands Morgan NASDAQ ASML 15,255
Taiwan Semiconductor
Mfg. (TSMC) Taiwan Citibank NYSE TSM 13,439
Sources: NYSE, NASDAQ, Bloomberg Financial Markets
----------------------------------
Top 10 Capital Raisings Using ADRs
(December 12, 2001 YTD)
Issuer Country Sponsor Exchange Date US$ Value
Korea Telecom
Corporation Korea Citibank NYSE 7/2/01 2,242,287,304
Hynix Semiconductor
Inc. Korea Citibank PORTAL 6/21/01 1,249,980,000
Embraer-Empresa
Brasileira de
Aeronautica S.A. Brazil Morgan NYSE 6/19/01 674,999,997
Petroleo Brasileiro
S.A. - Petrobras Brazil Citibank NYSE 7/24/01 650,945,607
CNOOC Limited Hong Kong Morgan NYSE 2/20/01 467,359,508
Abbey National plc U.K. BoNY NYSE 11/8/01 450,000,000
Royal Bank of
Scotland U.K. BoNY NYSE 6/5/01 400,000,000
Korea Tobacco &
Ginseng Corporation Korea BoNY PORTAL 10/24/01 309,174,000
Converium
Holdings AG Switzerland BoNY NYSE 12/11/01 192,001,179
Sunplus Technology
Co. Taiwan BoNY PORTAL 3/8/01 191,400,000
Source: Citibank and other depositaries
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