Prices of depositary receipts (DRs) for Asian technology companies led gains in the first quarter as DR trading rose more than 10 per cent over the end of 2012, according to the BNY Mellon Classic ADR Index Series.
Their appreciation was helped by surging US equity markets in the period, which reached levels not seen since before the financial crisis.
Taiwan’s Himax Technologies and Inotera Memories saw the price of their DRs more than double during the first three months of the year, with China’s WSP, Vipshop and Camelot Information Systems seeing increases by more than half – driven by US markets. But the biggest price gain was that of UK travel agent Thomas Cook, which saw its local stock rise too, following restructuring initiatives by the company.
“Investors still seem to favour stalwart sectors like technology, oil and gas, as well as banking when purchasing depositary receipts for their portfolios,” says Christopher M Kearns, chief executive of BNY Mellon’s Depositary Receipts business. “There are now more than 3,700 DR programs available to the world’s investors, compared with 3,500 a year ago.”
DRs typically represent non-US ordinary shares and trade on traditional and over-the-counter (OTC) markets and stock exchanges.
Meanwhile, the top-performing BNY Mellon country indices consisting of DRs from companies in the Philippines, Indonesia, and Oman ranked ahead of those from Ireland, Belgium, Sweden and Switzerland – in contrast with the trend in 2012, when returns on indices for Western European countries such as Germany, France and Switzerland performed better.
“Returns on our Asia-Pacific indices were solid this past quarter,” says Kearns. “Western Europe remains the largest and deepest DR market in the world with 11 billion DRs totalling USD210bn traded in the first quarter.”