Investing Internationally With American Depository Receipts and Shares
American Depository Receipts X Casablanca Problem: Shares of “Cafe Americain” sell on the Casablanca Exchange in francs and all the company’s publications are in French and Arabic.
American Depository Receipts Solution: • The Bank of New York buys 10,000 shares of Cafe Americain at f30. per share. • The Bank issues 1,000 Negotiable Receipts and sells them on the New York Stock Exchange at $15. • Each Cafe Americain ADR represents 10 shares of the company.
American Depository Receipts Solution: • The Bank has all the required and relevant documentation translated into English • The bank collects dividends in francs, converts them at a better rate of exchange, and pays it to ADR holders in dollars.
American Depository Receipts • If you own a Cafe Americain ADR then you have a receipt on a Bank which owns Cafe Americain Shares. The Bank of New York is the registered shareholder.
American Depository Shares X Casablanca • American Depository Shares are just like American Depository Receipts except that Rick issues the ADSs directly. • If you own a Cafe Americain ADS then you own a Cafe Americain Share;you are the registered shareholder.
ADRs & ADSs • ADRs and ADSs from all over the world trade on the NYSE, AMEX, and NASDAQ • British Airways BAB • Canadian Pacific CP • Daimler Benz DAI • Honda Motor Company HMC • Phillips NV PHG • Toyota TOYOY
ADRs & ADSs • The Wall Street Journal does not distinguish an ADR or ADS in its listings,however, Barrons (published by Dow Jones every Monday) states ADR or ADS in the listing.
UISES • UISES trades all stocks listed on the New York Stock Exchange,American Stock Exchange, &NASDAQ, Including .... • American Depository Receipts • American Depository Shares • Closed End Funds