Citibank Finds 2002 ADR Activity Mirrors Capital Markets Worldwide, with Asia Showing the Greatest Strength.Business Editors NEW YORK--(BUSINESS WIRE)--Dec. 12, 2002 Citigroup Citigroup U.S. holding company formed in 1998 from the merger of Citicorp (itself a holding company incorporated in 1967) and Travelers Group, Inc. The $70 billion merger included one of the largest U.S. investment banks, Salomon Smith Barney Inc. Inc. (NYSE NYSE See: New York Stock Exchange symbol: C): -- Trading volume increase of 6.8% over 2001 is driven by Asia, while decrease in value by 16.9% reflects overall market conditions -- ADR trading volume increases for traditional industry sectors Citibank CITIBANK First National City Bank 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. for 2002 is projected to increase 6.8% over 2001 to 28.1 billion shares (based on October October: see month. YTD See Year-to-date. YTD See year to date (YTD). annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. figures), but trading value is projected to decrease 16.9% from last year's levels to $569.3 billion. By way of comparison, for the U.S. market excluding ADRs, 2002 trading volume was 775 billion, up only 2.4% over last year, while value was down 15.3% to 18.9 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. - a decrease comparable to ADRs in the same time period. Capital raised in ADR form by non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. companies was $5.6 billion, down 33% from $8.4 billion in 2001. The growth in trading volume was driven by the Asia/Pacific region, where there was an increase of 15.9% over last year, compared to drops of -0.7% for 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). and -3.7% for 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. . Growth in Asia Pacific Drives ADR Trading Volume Worldwide (Volume in millions - split adjusted) ---------------------------------------------------------------------- Region 2001 2002P(a) % Change ---------------------------------------------------------------------- Western Europe 16,285 16,172 -0.7% ---------------------------------------------------------------------- Latin America 4,463 4,299 -3.7% ---------------------------------------------------------------------- Asia/Pacific 4,344 5,034 +15.9% ---------------------------------------------------------------------- Total World 26,330 28,122 +6.8% ---------------------------------------------------------------------- Source: NYSE, NASDAQ, AMEX (a) October 2002 YTD Projected "Capital market activity has been sluggish in 2002 and the ADR market has been no exception," said Kurt Kurt is a given name. Its principal English variant is Curt, while others include Cord, Curd, and Kort. It originated as a short form of Curtis, Konrad (Conrad), and Kunibert. 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. "Nevertheless, overall trading volume continues to rise, particularly in Asia, indicating investors' continued interest in ADRs despite the weak market conditions." Industry sector analysis reveals that although trading volume of ADRs in the telecom sector declined by 23.8%, there were increases for sectors such as Chemicals & Pharmaceuticals - up 43.9%, Energy - up 43.8%, and Food and Beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. - up 23.8%. These overall patterns are also evident in the composition of the Top 25 ADRs. However, Telecom continued as the dominant sector in ADR trading, with Nokia Nokia (nō`kēä), town (1996 pop. 26,326), Western Finland prov., SW Finland, on Lake Näsijärvi. It is an industrial community where wood and rubber products are manufactured. holding firm in the number one spot. ADR Trading Volumes Increase for Traditional Industries, While Telecom Declines ---------------------------------------------------------------------- 2002P by Industry 2001 2002P(a) % Change ---------------------------------------------------------------------- Mining & Minerals 808,548,800 2,506,271,400 210.0% ---------------------------------------------------------------------- Chemicals & Pharmaceuticals 2,100,121,800 3,022,087,200 43.9% ---------------------------------------------------------------------- Energy 2,223,881,500 3,196,846,800 43.8% ---------------------------------------------------------------------- Food & Beverage 627,767,500 857,719,200 36.6% ---------------------------------------------------------------------- Electronics 3,335,486,100 4,130,348,400 23.8% ---------------------------------------------------------------------- Banking 767,168,400 911,188,800 18.8% ---------------------------------------------------------------------- Telecommunications 10,952,633,900 8,341,302,600 -23.8% ---------------------------------------------------------------------- Source: NYSE, NASDAQ, AMEX (a) October 2002 YTD Projected Appetite ap·pe·tite n. An instinctive physical desire, as for food or sex. Appetite The natural instinctive desire for food. for Non-U.S. Equities Continues to Grow Among U.S. Investors 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 U.S. Federal Reserve, total U.S. investment in non-U.S. equities (both ADRs and non-U.S. shares) decreased by $322 billion (21%) during the third quarter of 2002 to $1.2 trillion. Declining asset values accounted for $304 billion of the total downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. , while net capital outflows Net Capital Outflow (NCO) is one of two major methods of determining the nature of a country's foreign trade (the other being the current account balance). NCO is the quantity of foreign assets held by residents of a given country minus the quantity of domestic assets in that accounted for just $17.0 billion. However, net quarterly outflows are quite rare and have occurred only seven times since 1987, 11% of the time. The overall trend is reinforced re·in·force also re-en·force or re·en·force tr.v. re·in·forced, re·in·forc·ing, re·in·forc·es 1. To give more force or effectiveness to; strengthen: The news reinforced her hopes. in that there were $1.7 billion in capital inflows to non-U.S. equities year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , 2002. Since the fourth quarter 1999 net capital inflows increased by $212 billion.
Capital Flows into Non-U.S. Equities (US$ Billions)
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US Investment Quarterly Quarterly Net
Qtr/Year in Non-US Change Change Quarterly Quarterly %
Equities Due to Due to Change Change
Capital Asset
Flows Values
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4Q1999 2,026.6
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4Q2000 1,832.4 (a)103.6 (a)(297.8) (a)(194.2) (a)(9.6%)
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1Q2001 1,609.1 21.5 (244.8) (223.3) (12.2%)
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2Q2001 1,652.0 55.7 (12.8) 42.9 2.7%
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3Q2001 1,416.8 10.9 (246.1) (235.2) (14.2%)
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4Q2001 1,564.7 18.7 129.2 147.9 10.4%
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1Q2002 1,565.2 (1.5) 2.0 0.5 0.03%
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2Q2002 1,536.3 20.2 (49.1) (28.9) (1.8%)
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3Q2002 1,214.7 (17.0) (304.6) (321.6) (20.9%)
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2002 YTD 1.7 (351.7) (350.0) (22.4%)
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Since 4Q99 212.1 (1,024.0) (811.9) (40.1%)
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Source: U.S. Federal Reserve, "Flow of Funds Accounts of the
United States, Third Quarter 2002," December 5, 2002
(a) Annual Change
Citibank has also found that individual investor appetite for non-U.S. equities continued to grow through self-directed self-di·rect·ed adj. Directed or guided by oneself, especially as an independent agent: the self-directed study of a language. self mutual funds. According to the Investment Company Institute, nearly $2.2 billion flowed into international equity mutual funds (both ADRs and non-U.S. shares) during the first ten months of 2002.
International Equity Mutual Funds Show Net New Cash Flows in 2002
(US$ Billions)
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Fund Type October 2002 YTD
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Emerging Markets 0.7
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Developed Markets (1) 2.4
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Regional Equity (2) (0.9)
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Total Int'l Funds 2.2
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Source: Investment Company Institute
(1) Includes Global (excl. U.S.) and International Equity Funds
(2) Includes both developed and emerging market regions
"The trend in purchases of non-U.S. securities over time suggests that investors in ADRs and non-U.S. shares continue to seek value in geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. and industry diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. , despite changing market conditions," said Schneiber. "As ADRs represent some of the world's best-known Adj. 1. best-known - most familiar or renowned; "Stevenson's best-known work is probably `Treasure Island'" known - apprehended with certainty; "a known quantity"; "the limits of the known world"; "a musician known throughout the world"; "a known criminal" international names, they provide an opportunity for U.S. investors to own the most highly liquid companies in important industry sectors, regardless of their geography geography, the science of place, i.e., the study of the surface of the earth, the location and distribution of its physical and cultural features, the areal patterns or places that they form, and the interrelation of these features as they affect humans. ." For more information on Citibank 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 is the market leader, widely recognized for delivering high quality, highly liquid programs to its customers. Citibank Depositary Receipt Services is a part of Citibank Global Securities Services, 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 network spanning 50 countries. It currently provides securities services to more than 2,500 customers worldwide and has more than $5 trillion in assets under custody The care, possession, and control of a thing or person. The retention, inspection, guarding, maintenance, or security of a thing within the immediate care and control of the person to whom it is committed. The detention of a person by lawful authority or process. . Citibank 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 200 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 BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. , and asset management. Major brand names under Citigroup's trademark red umbrella umbrella, a small canopy used as a protection against the sun in China, Egypt, and elsewhere in remote antiquity. It was often an emblem of rank. During the Middle Ages the umbrella became almost extinct in Europe; its usefulness was not rediscovered until the late include Citibank, CitiFinancial, Primerica, Salomon Noun 1. Salomon - American financier and American Revolutionary War patriot who helped fund the army during the American Revolution (1740?-1785) Haym Salomon 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 Life and Annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. . Additional information may be found at: www.citigroup.com
Top 25 ADRs by Trading Volume - 2002 Projected (Millions)
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Issuer Country Exchange Ticker Volume
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1 Nokia Corporation Finland NYSE NOK 3,050
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2 Taiwan Semiconductor
Mfg. Co.(TSMC) Taiwan NYSE TSM 1,403
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3 Elan Corp plc Ireland NYSE ELN 1,325
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4 Royal Dutch Petroleum
Company N.V. Netherlands NYSE RD 1,211
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5 Durban Roodepoort
Deep Ltd South Africa NASDAQ DROOY 856
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6 United Microelectronics
Corporation
(UMC) Taiwan NYSE UMC 855
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7 Vodafone Group
plc U.K. NYSE VOD 846
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8 ASML Holding, NV Netherlands NASDAQ ASML 707
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9 BP plc U.K. NYSE BP 624
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10 LM Ericsson
Telephone Co. Sweden NASDAQ ERICY 569
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11 Harmony Gold
Mining Co.
Ltd South Africa NASDAQ HGMCY 521
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12 Telefonos de
Mexico S.A.
de C.V. Mexico NYSE TMX 431
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13 Gold Fields Ltd. South Africa NYSE GFI 403
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14 STMicroelectronics
N.V. France NYSE STM 392
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15 Tele Norte Leste
Participacoes
S.A. Brazil NYSE TNE 376
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16 Petroleum
Geo-Services
A/S Norway NYSE PGO 353
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17 SAP
Aktiengesell-
schaft Germany NYSE SAP 337
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18 America Movil,
S.A. de C.V. Mexico NYSE AMX 331
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19 Unilever N.V. Netherlands NYSE UN 324
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20 Petroleo Brasileiro
S.A.
(Petrobras) Brazil NYSE PBR 314
----------------------------------------------------------------------
21 SkillSoft plc Ireland NASDAQ SKIL 308
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22 Alcatel S.A. France NYSE ALA 307
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23 KT Corporation Korea NYSE KTC 299
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24 Koninklijke Philips
Electronics
N.V. Netherlands NYSE PHG 282
----------------------------------------------------------------------
25 Business Objects
S.A. France NASDAQ BOBJ 270
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Source: NYSE, NASDAQ, AMEX, Bloomberg Financial Markets
October 2002 YTD Projected
Top 25 ADRs by Trading Value - 2002 Projected (US$ Millions)
----------------------------------------------------------------------
Issuer Country Exchange Ticker Value
----------------------------------------------------------------------
1 Royal Dutch
Petroleum
Company N.V. Netherlands NYSE RD 56,264
----------------------------------------------------------------------
2 Nokia
Corporation Finland NYSE NOK 51,538
----------------------------------------------------------------------
3 BP plc U.K. NYSE BP 28,878
----------------------------------------------------------------------
4 Taiwan Semiconductor
Mfg Co. (TSMC) Taiwan NYSE TSM 18,870
----------------------------------------------------------------------
5 Unilever N.V. Netherlands NYSE UN 18,796
----------------------------------------------------------------------
6 Teva Pharmaceutical
Industries Ltd. Israel NASDAQ TEVA 15,546
----------------------------------------------------------------------
7 Telefonos de Mexico
S.A. de C.V. Mexico NYSE TMX 14,688
----------------------------------------------------------------------
8 Vodafone Group plc U.K. NYSE VOD 14,224
----------------------------------------------------------------------
9 Elan Corp plc Ireland NYSE ELN 13,742
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10 GlaxoSmithKline
plc U.K. NYSE GSK 11,300
----------------------------------------------------------------------
11 ASML Holding, N.V. Netherlands NASDAQ ASML 11,129
----------------------------------------------------------------------
12 LM Ericsson
Telephone Co. Sweden NASDAQ ERICY 10,716
----------------------------------------------------------------------
13 AstraZeneca Group
plc U.K. NYSE AZN 10,577
----------------------------------------------------------------------
14 STMicroelectronics
N.V. France NYSE STM 9,595
----------------------------------------------------------------------
15 Total Fina Elf
S.A. France NYSE TOT 8,674
----------------------------------------------------------------------
16 SAP
Aktiengesell-
schaft Germany NYSE SAP 8,487
----------------------------------------------------------------------
17 Harmony Gold
Mining Co. Ltd. South Africa NASDAQ HGMCY 7,118
----------------------------------------------------------------------
18 Business Objects
S.A. France NASDAQ BOBJ 6,850
----------------------------------------------------------------------
19 Koninklijke Philips
Electronics N.V. Netherlands NYSE PHG 6,746
----------------------------------------------------------------------
20 KT Corporation Korea NYSE KTC 6,451
----------------------------------------------------------------------
21 United Microelectronics
Corporation (UMC) Taiwan NYSE UMC 6,288
----------------------------------------------------------------------
22 Petroleo Brasileiro
S.A. (Petrobras) Brazil NYSE PBR 5,761
----------------------------------------------------------------------
23 News Corporation
Limited, The Australia NYSE NWS 5,621
----------------------------------------------------------------------
24 Grupo Televisa,
S.A. de C.A. Mexico NYSE TV 5,596
----------------------------------------------------------------------
25 Novartis AG Switzerland NYSE NVS 5,568
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Source: NYSE, NASDAQ, AMEX, Bloomberg Financial Markets
October 2002 YTD Projected
Capital Raisings Using ADRs - 2002
----------------------------------------------------------------------
Issuer Country Exchange Event Date Value
(US$ Millions)
----------------------------------------------------------------------
Companhia Vale de
Rio Doce (CVRD) Brazil NYSE 03/27/02 1,087
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Lukoil Russia PORTAL 12/04/02 788
----------------------------------------------------------------------
Kookmin Bank Korea NYSE 06/19/02 695
----------------------------------------------------------------------
AU Optronics Corp. Taiwan NYSE 05/29/02 659
----------------------------------------------------------------------
SK Telecom Co., Ltd. Korea NYSE 07/25/02 431
----------------------------------------------------------------------
China Telecom
Corporation
Limited China NYSE 11/06/02 401
----------------------------------------------------------------------
Realtek Semiconductor
Corp. Taiwan PORTAL 01/24/02 271
----------------------------------------------------------------------
CNH Global N.V. Netherlands NYSE 06/14/02 200
----------------------------------------------------------------------
KorAm Bank Korea PORTAL 04/30/02 199
----------------------------------------------------------------------
Wimm-Bill-Dann
Foods, OJSC Russia NYSE 02/08/02 165
----------------------------------------------------------------------
Powerchip Semiconductor
Corp. Taiwan PORTAL 05/08/02 149
----------------------------------------------------------------------
Promos Technologies
Inc. Taiwan PORTAL 05/17/02 146
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Yukos Russia N/A 02/28/02 137
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Ambit Microsystems
Corporation Taiwan PORTAL 01/08/02 70
----------------------------------------------------------------------
IONA Technologies
plc Ireland NASDAQ 03/05/02 69
----------------------------------------------------------------------
SABESP Brazil NYSE 05/10/02 67
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Randgold & Exploration
Co. Ltd. South Africa NASDAQ 07/10/02 35
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Nidec Corporation Japan NYSE 02/01/02 22
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Grupo Financiero BBVA
Bancomer, S.A.
de C.V. Mexico PORTAL 06/19/02 13
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Advantest Corporation Japan NYSE 10/04/02 3
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Nissin Co. Ltd. Japan NYSE 08/02/02 1
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Source: Citibank and other depositaries
YTD through December 10, 2002
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