Citibank Study Reveals Record Highs For ADR Trading and Capital Raised in 2000.Business Editors NEW YORK--(BUSINESS WIRE)--Dec. 7, 2000 - ADR trading value surges by 72% in 2000. All-time high projected at $1.2 trillion shows unprecedented investor interest in non-US equities worldwide. - Capital raised using depositary receipts reaches $29.5 billion, up 35% over 1999's previous record. - Citibank study confirms growing individual investor appetite for non-US equities; US$ denominated ADRs fit with individuals' "buy and hold" strategy. Investors Trade ADRs at All-Time all-time adj. Exceeding all others up to the present time: an all-time speed skating record. all-time Adjective Informal High Level in 2000 Citibank CITIBANK First National City Bank today reported worldwide record increases in its year end analysis of the ADR ADR - Astra Digital Radio market. Overall, ADR cross border capital flows grew 94% over last year, with higher volumes caused primarily by dramatic market fluctuations due to the global technology slump Slump A temporary fall in performance, often describing consistently falling security prices for several weeks or months. and by a slowing US economy, which made foreign markets more attractive to US investors. ADR 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. rose to a projected record of 30.5 billion shares, an increase of 82% over 1999. This exceeded the 70% growth rate of the entire US market excluding ADRs rising to 773 billion shares. ADR trading value reached a projected record of $1.2 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 surge of 72% in 2000 compared with 1999. This exceeded the 66% growth rate of the entire US market excluding ADRs rising to $31.0 trillion. Three top-performing companies contributed significantly to the record volumes: - 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. Corporation, Finland Finland, Finnish Suomi (swô`mē), officially Republic of Finland, republic (2005 est. pop. 5,223,000), 130,119 sq mi (337,009 sq km), N Europe. - trading value projected $174 billion - LM Ericsson Er·ics·son , John 1803-1889. American engineer and inventor who built the first ironclad warship, the Monitor (1862), which engaged the Confederate Merrimack in a famous naval battle of the Civil War (March 9, 1862). Telephone Co., Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. - trading value projected $113 billion - Vodafone Vodafone Group Plc is a mobile network operator headquartered in Newbury, Berkshire, England, UK. It is the largest mobile telecommunications network company in the world by turnover and has a market value of about £84.7 billion (July 2007). Group plc, UK - trading value projected $62 billion In 2000, for the eighth year in a row, Citibank delivered the most liquid ADR programs in terms of number of shares traded and trading value (see tables attached for detail). ADR Capital Raisings Set New Record Through December December: see month. 1, 2000, capital raised by non-US companies using 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 reached a record $29.5 billion, up 35% from 1999's record and up 207% over the $9.6 billion raised in 1998. All regions contributed to the increase, with the largest percentage gains coming from 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. - 1,256% to $6.3 billion, and Developed Asia (Japan, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). , Australia and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. ) - 108% to $3.6 billion. The most significant capital raisings using depositary receipts during the second half of 2000 included: - Petroleo Brasileiro (Petrobras), Brazil - $2.1 billion privatization privatization: see nationalization. privatization Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned - Serono S.A., Switzerland - $1.5 billion offering - United Microelectronics Corporation UMC (United Microelectronics Corporation) was founded as Taiwan's first semiconductor company in 1980 as a spin-off of the government-sponsored institute ITRI. Today, UMC is best known for its merchant foundry business, manufacturing integrated circuits wafers for fabless , Taiwan - $1.3 billion offering Citibank continued to facilitate the largest capital raisings using depositary receipts during the second half of 2000 (see table attached for detail). Investors Hold ADRs in Mutual Funds More than Ever Before The updated Citibank ADR study reveals that ADRs as a percent of total global (excluding US and Canada) and international mutual fund net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. have more than doubled from 27% in 1994 to 56% as of June 2000. Data from the US Federal Reserve shows total US investment in non-US equities has reached $2 trillion, a seven-fold increase from $279 billion in 1991. US individual investment in non-US equities, either directly or through brokerage accounts Brokerage Account An arrangement between an investor and a licensed brokerage firm that allows the investor to deposit funds with the firm and place investment orders through the brokerage, which then carries out the transactions on the investor's behalf. or mutual funds, has grown from an estimated 17% of total equity investment in 1991 to an estimated 52% ($1.04 trillion) in 2000 and is projected to exceed 56% by 2003. "Individual investor appetite for non-US securities has increased significantly," said Kurt Schneiber, Global Managing Director, Citibank Depositary Receipt Services. "Individuals tend to adopt a conservative `buy and hold' strategy that is more compatible with the characteristics of US$ denominated ADRs than with foreign ordinary shares." Citibank Study Forecasts Investor Behavior and Fund Flows The study tracks ADR investor response to US economic factors including a lagged response to aggressive credit tightening begun by the Fed in June 1999. "Our analysis points to a transition from ADR outflows to inflows during December," said Schneiber, "and we expect this trend to continue through the second quarter of 2001." Slowing US economic growth and reduced inflation risks increase the likelihood of a credit easing by the Fed in 2001. In addition the European Central Bank European Central Bank (ECB) Bank created to monitor the monetary policy of the countries that have converted to the Euro from their local currencies. The original 11 countries are: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, is likely to continue to raise rates aggressively in 2001 to control inflation and strengthen the Euro. "Citibank forecasts a lagged resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of outflows during the third and fourth quarters of 2001 in response to an anticipated mid-year US market recovery and slowing growth in the Euro area," said Schneiber.
ADR Quarterly Cross-Border Inflows and Outflows
1999 2000 2001 Forecast
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Region 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
============== ==== ==== ==== ==== ==== ==== ==== ==== ====
Europe 78% 85% -144% -208% -/+ + + - -
-------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
Developed Asia 41% 11% 1% 33% +/- - + + -
-------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
Emerging Asia -56% 93% 7% -44% -/+ + + - -
-------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
Latin America 18% -13% -8% 79% +/- - + + -
-------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total World 14% 46% -43% -91% -/+ + + - -
-------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
Legend: Citibank forecast symbols: + inflows; - outflows; -/+ transition from outflows to inflows; +/- transition from inflows to outflows. Source: Citibank Analysis For a copy of the full study, visit www.citibank.com/adr. Citibank Depositary Receipt Services leads the market in bringing quality issuers to the US market and promoting ADRs as an effective capital markets tool. Citibank began offering American Depositary Receipts 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. 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 Worldwide Securities Services (WWSS WWSS Worldwide Satellite Systems (US DoD contract vehicle) WWSS Warfare and Warfare Support System ), a business within Citigroup's Global Corporate and Investment Bank. WWSS 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 51 countries and territories. It currently provides securities services to more than 2,500 customers worldwide and has $4 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 NYSE See: New York Stock Exchange :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, provides some 120 million consumers, corporations, governments and institutions in more than 100 countries 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 brands under Citigroup's trademark red umbrella are - Citibank, Travelers, 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. , Citifinancial and Primerica. Visit our new web site at www.citibank.com/adr. Information contained herein is a matter of record only. It should not be construed as advice or a recommendation by Citibank.
Top 25 Exchange-Listed ADRs based on Shares Traded
Full Year 2000 Projected
(Millions)
Sponsored Ticker Projected 2000
Issuer Name Country Depositary Exchange Symbol Shares Traded
----------------------------------------------------------------------
LM Ericsson
Telephone Co. Sweden Citibank NASDAQ ERICY 5,734.5
Nokia Corporation Finland Citibank NYSE NOK 2,689.1
Vodafone Group plc U.K. BoNY NYSE VOD 1,315.8
BP Amoco plc U.K. Morgan NYSE BP 881.3
Telefonos de Mexico
S.A. de C.V. Mexico Morgan NYSE TMX 668.2
Royal Dutch
Petroleum Company
N.V. Netherlands Morgan NYSE RD 584.2
Alcatel S.A. France BoNY NYSE ALA 504.8
ASM Lithography
Holding, N.V. Netherlands Morgan NASDAQ ASML 476.7
Elan Corp plc Ireland BoNY NYSE ELN 474.9
Taiwan Semiconductor
Manufacturing
Company Ltd. Taiwan Citibank NYSE TSM 417.4
Telefonica S.A. Spain Citibank NYSE TEF 384.3
Telecommunicacoes
de Sao Paolo S.A. Brazil BoNY NYSE TSP 373.6
Terra Networks S.A. Spain Citibank NASDAQ TRLY 347.6
Teva Pharmaceutical
Industries Ltd. Israel BoNY NASDAQ TEVA 323.4
STMicroelectronics
N.V. France BoNY NYSE STM 296.8
Deutsche Telekom AG Germany Citibank NYSE DT 294.2
Telebras Holding
Company Depositary
Receipts Brazil BoNY NYSE TBH 287.9
Koninklijke Philips
Electronics N.V. Netherlands Citibank NYSE PHG 270.4
Tele Norte Leste
Participacoes S.A. Brazil BoNY NYSE TNE 233.7
Embratel
Participacoes S.A. Brazil BoNY NYSE EMT 233.3
SK Telecom Co.,Ltd. Korea Citibank NYSE SKM 222.6
News Corporation
Limited, The Australia Citibank NYSE NWS 218.0
SAP Aktiengesellschaft Germany BoNY NYSE SAP 215.1
Satyam Infoway
Limited India Citibank NASDAQ SIFY 211.9
China Unicom
Limited China BoNY NYSE CHU 211.4
Sources: NYSE, NASDAQ, Bloomberg Financial Markets. Based on October
2000 YTD projected values.
Top 25 Exchange-Listed ADRs based on US$ Value of Trading
Full Year 2000 Projected
(US$ Bn)
Sponsored Ticker Projected 2000
Issuer Name Country Depositary Exchange Symbol Value of Trading
----------- ------- ---------- -------- ------ ----------------
Nokia
Corporation Finland Citibank NYSE NOK 173.7
LM Ericsson
Telephone Co. Sweden Citibank NASDAQ ERICY 112.5
Vodafone
Group plc U.K. BoNY NYSE VOD 61.7
BP Amoco plc U.K. Morgan NYSE BP 46.7
Telefonos de
Mexico S.A.
de C.V. Mexico Morgan NYSE TMX 41.8
Royal Dutch
Petroleum
Company N.V. Netherlands Morgan NYSE RD 34.6
Telebras
Holding
Company
Depositary
Receipts Brazil BoNy NYSE TBH 34.3
Alcatel S.A. France BoNY NYSE ALA 28.7
Telefonica
S.A. Spain Citibank NYSE TEF 26.0
STMicroelectronics
N.V. France BoNY NYSE STM 25.6
Elan Corp
plc Ireland BoNY NYSE ELN 21.4
Koninklijke
Philips
Electronics
N.V. Netherlands Citibank NYSE PHG 18.7
Sony
Corporation Japan Morgan NYSE SNE 18.3
ASM
Lithography
Holding N.V. Netherlands Morgan NASDAQ ASML 18.0
Taiwan
Semiconductor
Manufacturing
Company Ltd. Taiwan Citibank NYSE TSM 15.7
Terra
Networks S.A. Spain Citibank NASDAQ TRLY 14.6
Teva
Pharmaceutical
Industries
Ltd. Israel BoNY NASDAQ TEVA 14.4
Deutsche
Telekom AG Germany Citibank NYSE DT 12.8
Grupo
Televisa,
S.A. de C.A. Mexico Citibank NYSE TV 12.4
SAP
Aktiengesollschaft Germany BoNY NYSE SAP 12.1
Business
Objects S.A. France BoNY NASDAQ BOBJ 11.9
News
Corporation
Limited, The Australia Citibank NYSE NWS 11.1
Telecommunicacoes
de Sao
Paolo S.A. Brazil BoNY NYSE TSP 10.2
Chartered
Semiconductor
Manufacturing
Ltd. Singapore Citibank NASDAQ CHRT 10.0
Satyam, Infoway
Limited India Citibank NASDAQ SIFY 9.9
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Sources: NYSE, NASDAQ, Bloomberg Financial Markets. Based on October
2000 YTD projected values.
Top 10 Capital raisings Using ADRs
November 200YTD
Capital Raised
Eff. Using DRs
Issue Name Country Depositary Date Exchange US$ Millions
------------- ------- ---------- ------ -------- -------------
China Unicom
Limited Hong Kong BoNY 6/21 NYSE 2,060.1
Petroleo
Brasileiro
S.A.-
Petrobras Brazil Citibank 8/15 NYSE 2,047.7
Telefonos de
Mexico S.A.
de C.V. Mexico Morgan 6/23 NYSE 1,692.1
Serono S.A. Switzerland BoNY 7/26 NYSE 1,476.2
Deutsche
Telekom AG Germany Citibank 6/17 NYSE 1,415.9
United
Microelectronics
Corporation
("UMC") Taiwan Citibank 9/21 NYSE 1,291.5
China Mobile
(Hong Kong)
Limited
(formerly China
Telecom) China BoNY 10/31 NYSE 1,230.8
Taiwan
Semiconductor
Manufacturing
Company Ltd. Taiwan Citibank 6/7 NYSE 1,167.9
Grupo Televisa,
S.A. de C.A. Mexico Citibank 1/19 NYSE 1,115.7
Royal Bank
of Scotland U.K. BoNY 2/28 NASDAQ 1,000.0
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Source: Citibank and other depositaries
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