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Depositary receipts show strong price performance growth in emerging markets

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The total global trading volume of depositary receipts (DRs) – negotiable financial instruments issued by a bank to represent a foreign company's publicly traded securities – reached USD152.1 billion, and USD2.9 trillion in traded value in 2016, according BNY Mellon’s 2016 Depositary Receipt Market Review.

Over USD8 billion was raised through 37 new DR offerings, and 68 new sponsored DR programmes were created.
 
More than 3,400 sponsored and unsponsored DR programmes existed at year end 2016.
 
The BNY Mellon ADR Index saw a 3.72 per cent total return for the year. While that benchmark underperformed the US market, as measured by the S&P 500 – which was up 1.96 per cent as of December 30, 2016 – the BNY Mellon Emerging Market Regional DR Index outperformed, growing by 13.65 per cent. 
 
Sub-indices based on securities of companies from the major emerging markets of Brazil and Russia gained 69.05 per cent and 61.02 per cent, respectively.
 
At year end, BNY Mellon marked a 57 per cent global market share of all sponsored DR programmes – more than the total market share of all its competitors combined.
 
“Depositary receipts’ cost, convenience and liquidity value proposition remains as intact today as ever,” says Christopher M Kearns (pictured), CEO of BNY Mellon's depositary receipts business. “DRs are an integral component in many investment portfolios and this year’s Review celebrates DRs from the point of view of both issuers and investors.”

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