ADR commonly referred to American Depository Receipts.
ADR allows US investors to purchase shares from foreign stock exchanges. Most of the stocks across all exchanges get listed in ADR and the U.S Banks takes care of the transaction with the US investors.
Investors buy these shares in US dollars and they do not want to worry about the exchange price.
Those exchange rates are taken care by the U.S Banks who felicitate this transaction.
All these ADR’s can be traded on the American stock exchanges.
The dividends on these shares are paid in US Dollars.
Price of the share both in home and foreign country will be same or equivalent considering the exchange rates.
Sponsored ADR:
The foreign company will pay the cost for issuing the ADR and retain control over it. The US banks will handle the transaction with the investors.
Unsponsored ADR:
The US banks can issue unsponsored ADR but they don’t have any participation, involvement or permission from the foreign company. There can be several US Banks providing unsponsored ADR for the same foreign company. In this case the dividends can vary.
Best Regards,
B G Nareshkumar.
ADR allows US investors to purchase shares from foreign stock exchanges. Most of the stocks across all exchanges get listed in ADR and the U.S Banks takes care of the transaction with the US investors.
Investors buy these shares in US dollars and they do not want to worry about the exchange price.
Those exchange rates are taken care by the U.S Banks who felicitate this transaction.
All these ADR’s can be traded on the American stock exchanges.
The dividends on these shares are paid in US Dollars.
Price of the share both in home and foreign country will be same or equivalent considering the exchange rates.
Sponsored ADR:
The foreign company will pay the cost for issuing the ADR and retain control over it. The US banks will handle the transaction with the investors.
Unsponsored ADR:
The US banks can issue unsponsored ADR but they don’t have any participation, involvement or permission from the foreign company. There can be several US Banks providing unsponsored ADR for the same foreign company. In this case the dividends can vary.
Best Regards,
B G Nareshkumar.
No comments:
Post a Comment