Citibank reports ADR trading volumes; hit record highs for 1995.

NEW YORK--(BUSINESS WIRE)--Jan. 2, 1996--In a year where investors appeared transfixed by a soaring U.S. stock market, trading volumes for American Depositary Receipts (ADRs) also hit record highs, Citibank reported today.

ADRs are U.S. securities that represent shares of a non-U.S. company and trade in the U.S. financial markets similar to the way ordinary shares of U.S. companies do.

The total number of ADR shares traded on U.S. stock exchanges (NYSE, Nasdaq and AMEX) during 1995 jumped to 10 billion, representing an increase of 38% over 1994. The dollar value of these trading volumes was $278 billion, a 12% increase over 1994.

While there was continued heavy trading of ADRs by investors, the pace of new ADR offerings by companies outside the U.S. remained below last year's record levels, primarily a result of widespread price declines in foreign company shares -- particularly in the emerging markets earlier in the year.

"Though a number of foreign markets hit road bumps in 1995, the market for listed ADRs here in the U.S. continued to exhibit healthy liquidity overall and we anticipate strong growth, both in trading volumes and new issuance, through the end of the decade," said Sandra Jaffee, Citibank's division executive for Worldwide Securities Services.

Jaffee noted that U.S. investor demand for foreign stocks has been growing in recent years and that this trend is expected to continue. U.S. investment in international securities grew from $17 billion in 1981 to $307 billion in 1994 and some analysts expect that figure to reach $1 trillion by the turn of the century.

"Citibank has been a big engine in the growth of this market, with our listed programs contributing over half the market growth in ADR trading volumes over the past few years," Jaffee said. "We're continuing to commit substantial resources around the world to this important market for the benefit of our issuing clients, brokers and investors."

The ten most actively traded ADRs through Nov. 30, 1995 in terms of U.S. dollar value of trading were (in order): Telefonos de Mexico; Royal Dutch Petroleum; LM Ericsson Telephone; Nokia Corp.; Vodafone Group plc; Hanson plc; Philips N.V.; British Petroleum plc; Grupo Televisa and YPF S.A. Citibank acts as depositary bank for half of these top traded ADRs.

New ADR Issuance

The number of companies choosing to launch new depositary receipt programs during 1995 remained below the previous year's record pace. At the end of the year, 192 companies in 44 countries had launched new programs. Citibank continued to win a substantial share of the market with the bank acting as depositary for one third of the issuers launching new programs during the period.

Europe was the one region where the number of companies launching new ADR programs in 1995 increased over 1994 levels. These gains were offset, however, by significantly fewer offerings out of Latin America as well as fewer from Asia compared to 1994.

The most active issuing market during 1995 was the UK with 29 companies establishing new depositary receipt programs. It was followed by: Hong Kong (25 companies); South Africa (13); Germany (10); and The Netherlands (9). Additional countries where companies established programs included: Australia, Austria, Bolivia, Brazil, Chile, China, Colombia, Czech Republic, Denmark, Ecuador, Finland, France, Ghana, Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Korea, Lebanon, Luxembourg, Mexico, New Guinea, Norway, Peru, Philippines, Poland, Portugal, Russia, Singapore, Slovakia, Sweden, Switzerland, Taiwan, Trinidad, Turkey and Venezuela.

"While fewer new ADR programs were established compared to 1994's all-time record number, issuers around the world are expressing keen interest in this market and the pipeline for 1996 looks strong," said James P. Donovan, Citibank's managing director for depositary receipts. "Barring any unexpected events, we believe the new issuance market will be active across Europe, Latin America and Asia next year. One trend we expect to see is more companies pursuing exchange-listed ADR programs." Donovan also noted that Citibank expects to see ADRs used in a number of large capital raisings next year, particularly out of Europe. "The year 1996 could well be the year of the mega-deal for the ADR market."

Capital Raised Through Depositary Receipts

Of the companies launching new depositary receipt programs in 1995, 96 used them to raise $11.5 billion in new capital. This year's total represented 58% of 1994's record capital raised of $20 billion was flat to 1993's level. Sixty-four percent of the capital raised came out of Europe; 29% from Asia; 5% from Latin America and 2% from Africa. The vast majority of capital raisings (80%) took place during the second half of the year. Companies using ADRs to fund privatizations accounted for 42% of the capital raised, or $4.8 billion. Top privatizations for 1995 included: ENI S.p.a; SGS-Thompson Microelectronics N.V.; KPN; Gucci Group N.V.; and Telefonica de Espana.

"There was significantly less capital-raising activity out of the emerging markets this year as issuers postponed offerings in the wake of price declines early in the year," said Mark A. Bach, Citibank's global sales director for ADRs. "Many of these markets have now seen some price recovery and this bodes well for a more active environment for capital raising through ADRs out of the emerging markets in 1996. Korea, Taiwan and Brazil could see significant deal flow, and in Europe we expect Germany and the UK to be active next year."

At the end of 1995, there were 1,549 depositary receipt programs in existence. Some 636 programs represent issuers in Asia/Pacific; 583 in Europe; 208 in Latin America and 122 in Africa. Banking was the most active industry segment with 19 companies launching new programs, followed by the telecommunications industry, which had 15 companies launching new programs.

Citibank, which serves over 500 depositary receipt programs worldwide, began offering depositary receipt services to clients in 1928 and has been a market leader as well as the top market innovator in recent years. With a local presence in 95 countries and unparalleled strength in delivering on-line information through its proprietary systems and network, Citibank is uniquely qualified to support the funding needs of companies around the world.

CONTACT: Citibank N.A., New York 

Jarvis Cromwell, VP

212/657-0195

Fax [phone]