The Business of Investment Banking

By K. Thomas Liaw | Go to book overview

7
Foreign Listing on
Wall Street

With rapid advances in information technology and greater cooperation among financial regulators, the international capital markets are now more closely linked. Listing of foreign companies on Wall Street, in the form of depositary receipts,1 is an important element in this process of market integration. Foreign companies seek listing on Wall Street to raise capital, gain liquidity, and stress shareholder information. On the demand side, U.S. investors are looking to take advantage of new capital growth opportunities and to add an additional element of diversification in international securities. Within the next few years, U.S. investors are expected to double the non-U.S. component of their equity portfolio from 5% to around 10%. Investment banking firms need to seize the opportunity to facilitate the global capital raising and capital allocating process. This chapter describes the structure and types of American Depositary Receipts (ADRs), including Rule l44As. The process of bringing ADRs to the marketplace and the legal requirements are described.


MARKET OVERVIEW

J.P. Morgan created the first ADR in 1927 to allow Americans to invest in the British retailer Selfridge. ADRs have since evolved in sophistication and in importance. ADRs are now among the commonly used vehicles to invest internationally and have become fully integrated into the U.S. capital markets. They are an efficient, transparent, cost-effective and liquid method for U.S. investors to make specific foreign investments. ADRs provide U.S. investors an additional venue to acquire and trade non-U.S. securities in U.S. dollars without concern for the differing settlement process, securities custody, and currency exchange. Through ADRs, Americans can also achieve the benefits of systematic risk reduction not obtainable in the U.S. domestic markets. For a foreign company, some structures of ADRs allow the company to raise U.S. capital, while others provide a mechanism that improves such company's visibility in the United States.

The process of creating a new ADR is as follows. Upon demand, a U.S. depositary bank contacts a broker in the issuing company's home market and acquires shares in that company. These shares are then deposited with the depositary bank's local custo

-111-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
The Business of Investment Banking
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Preface vii
  • Acknowledgments ix
  • 1: Investment Banking in Global Capital Markets 1
  • 2: Venture Capital Markets 9
  • 3: Mergers and Acquisitions 27
  • 4: Stock Underwriting 47
  • 5: Underwriting Fixed-Income Securities 72
  • 6: Asset Securitization 94
  • 7: Foreign Listing on Wall Street 111
  • 8: Euromarkets and European Markets 125
  • 9: Japanese Securities Markets 148
  • 10: Emerging Markets 167
  • 11: Trading and Trading Techniques 185
  • 12: Repurchase Transactions 203
  • 13: Financial Engineering 222
  • 14: Money Management 241
  • 15: Clearing and Settlement 261
  • 16: Securities Regulation and Ethics 275
  • 17: Investment Banking Trends and Section 20 296
  • Chapter Notes 309
  • Glossary 315
  • Index 325
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen
/ 340

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.