EMERGING MARKETS INVESTOR: DR NEWS
By Gordon Platt
BNY Mellon is helping to bring American depositary receipts (ADRs) to Singapore and exchange-trade funds (ETFs) based on its DR indexes to Shanghai. This will provide access for local investors to major Asia-based companies, many of which do not have home exchanges in the region.
Singapore Exchange (SGX) has begun quoting ADRs of 19 major Asian companies on its new GlobalQuote board. The ADRs traded in Singapore are fully fungible with US-listed ADRs as the result of a cooperation agreement with Nasdaq OMX.
BNY Mellon is acting as depositary bank for SGX’s new ADR program. “SGX GlobalQuote will benefit global investors by providing access and extended trading opportunities in the region, demonstrating the continued evolution of the DR product while ensuring the needs of the market are met,” says Michael Cole-Fontayn, CEO of the depositary receipts business at BNY Mellon.
The bank also signed a memorandum of understanding with the Shanghai Stock Exchange to collaborate on ETFs based on BNY Mellon’s DR indexes. “The inclusion of Chinese single-listed ADRs in our indices will enable potential ETF sponsors to offer an investment product that includes offshore-listed Chinese companies, such as Baidu, Netease, Home Inns and Ctrip,” says Gregory Roath, head of Asia-Pacific for BNY Mellon’s DR business.
An ETF product based on the DR indexes would enable China-based investors to gain exposure to foreign-traded equities and to trade them in renminbi on the Shanghai exchange, Roath says.