What is a GDR (global depository receipt)
A global depository receipt (GDR) is a financial term used to refer to a certificate that is issued and sold on a stock exchange by a depositary bank to represent shares in a foreign company. GDRs enable investors to trade shares in companies that are not eligible for direct listing on their domestic exchange. Essentially, through a certificate issued by a depositary bank, it is a way for investors to buy and sell shares in foreign companies.
Where have you heard of GDRs?
Global Depository Receipts (GDRs) are often discussed as a viable investment option for investors looking to diversify their portfolios with exposure to international markets, particularly emerging markets such as China and India. GDRs are shares issued by depositary banks on a stock exchange to represent shares in a foreign company, which enables investors to buy and sell shares in companies that are not eligible for listing directly on their local exchange.
What should you know about Global Depositary Receipts?
How do GDRs work?To issue GDRs, a company uses a foreign bank as an intermediary to buy shares in its home market, create a GDR representing the shares, and then sell the GDRs on a foreign stock exchange to raise funds from foreign markets. GDRs are usually traded in US dollars or euros and represent a specific number of common shares in a company, with the voting rights held by the depository bank rather than the GDR holder.
Unlike ADRs, which enable foreign company shares to be traded on US stock exchanges, GDRs can be traded in multiple countries and are listed on the IOB. The IOB was established in 2001 as a central electronic order book to provide investors with direct access to GDRs from over 30 countries. The LSE operates the IOB and trades are settled by the Euroclear clearing house, acting as a central securities depository.
Emerging market companies may choose to list GDRs on foreign stock exchanges to raise capital for expansion or debt repayment. By listing on larger international markets, they can attract more investors and higher share prices.
Investors who wish to benefit from the growth potential of companies in the developing world as compared to the more established economies may wish to invest in GDRs. GDRs provide investors with a convenient way to invest in foreign companies, as they can be traded through their regular brokerage accounts instead of having to exchange currencies and open foreign accounts.
For example, Samsung Electronics, a multinational electronics company from South Korea, has its GDRs listed on several European exchanges such as the LSE, the Frankfurt Stock Exchange and the Luxembourg Stock Exchange (LuxSE). GAIL India, the largest gas company in India, trades its GDRs on the LSE. Gazprom, one of the world’s largest energy companies based in Russia, also trades its GDRs on foreign exchanges such as the Singapore Stock Exchange.
GDR (Global Depository Receipt) ni kifungu cha kifedha kinachotumiwa kuelezea cheti ambacho kinatolewa na kuuzwa kwenye soko la hisa na benki ya hifadhi kuwakilisha hisa katika kampuni ya kigeni. GDRs kuwawezesha wawekezaji biashara hisa katika makampuni ambayo si halali kwa ajili ya orodha ya moja kwa moja juu ya kubadilishana yao ya ndani. Kwa kweli, kupitia cheti kilichotolewa na benki ya amana, ni njia kwa wawekezaji kununua na kuuza hisa katika makampuni ya kigeni. Je, umesikia kuhusu GDR? Global Depository Receipts (GDRs) ni aina ya hisa ya kimataifa ambayo inahitajika kwa ajili ya uwekezaji wa uwekezaji wa kimataifa, hasa kwa ajili ya nchi zinazoendelea kama vile China na India. GDRs ni hisa zilizotolewa na benki ya amana kwenye soko la hisa kuwakilisha hisa katika kampuni ya kigeni, ambayo inawawezesha wawekezaji kununua na kuuza hisa katika makampuni ambayo si halali kwa ajili ya orodha moja kwa moja katika soko yao ya ndani. Ni nini unapaswa kujua kuhusu Global Depository Receipts? GDRs ni biashara ya fedha ya kigeni ambayo hufanywa na kampuni ya kigeni inayomiliki hisa za GDRs, ambayo huchukua hisa za GDRs kutoka kwa kampuni ya kigeni na kuuza hisa za GDRs kwenye soko la hisa la kigeni. GDRs ni kawaida kuuzwa katika dola za Marekani au euro na kuwakilisha idadi maalum ya hisa za kawaida katika kampuni, na haki za kupiga kura uliofanyika na benki ya amana badala ya mmiliki GDR. Tofauti na ADRs, ambayo inaruhusu hisa za kampuni za kigeni kuuzwa kwenye masoko ya hisa ya Marekani, GDRs inaweza kuuzwa katika nchi nyingi na imeorodheshwa kwenye IOB. IOB ilianzishwa mwaka 2001 kama kitabu cha amri cha elektroniki cha kati ili kuwapa wawekezaji upatikanaji wa moja kwa moja wa GDR kutoka nchi zaidi ya 30. LSE inaendesha IOB na biashara ni kusuluhishwa na Euroclear Clearing House, kutenda kama hifadhi ya dhamana ya kati. Kampuni zinazoibuka za soko zinaweza kuchagua kuorodhesha GDRs kwenye masoko ya hisa ya kigeni ili kukusanya mtaji kwa upanuzi au malipo ya deni. Kwa kuorodhesha kwenye masoko makubwa ya kimataifa, wanaweza kuvutia wawekezaji zaidi na bei ya hisa ya juu. Wawekezaji ambao wanataka kufaidika na uwezo wa ukuaji wa makampuni katika nchi zinazoendelea ikilinganishwa na uchumi zaidi ya kuanzishwa wanaweza kutaka kuwekeza katika GDRs. GDRs hutoa wawekezaji njia rahisi ya kuwekeza katika makampuni ya kigeni, kwani wanaweza kuuzwa kupitia akaunti zao za kawaida za wakala badala ya kubadilishana sarafu na kufungua akaunti za kigeni. Samsung Electronics, kampuni ya kimataifa ya umeme kutoka Korea Kusini, ina GDRs yake iliyoorodheshwa kwenye masoko kadhaa ya Ulaya kama vile LSE, Frankfurt Stock Exchange na Luxembourg Stock Exchange (LXSE). GAIL India, kampuni kubwa ya gesi nchini India, inafanya biashara ya GDRs zake kwenye LSE. Gazprom, moja ya makampuni makubwa ya nishati duniani yenye makao yake makuu nchini Urusi, pia inafanya biashara ya GDRs zake kwenye masoko ya kigeni kama vile Singapore Stock Exchange.