Sector - Depositary Receipts (ADR/GDR)

Achievement Awards 2009: Depositary receipts

Our pick for the best DR house and deal.

Keep the receipt

A year after an SEC rule change made it easier to issue depositary receipts in the US, the industry’s key players are benefiting from a host of new opportunities. Tim Burke reports.

Orascom looks to issue first EDR

Orascom Development, the Egyptian real estate company, is looking to issue the first-ever Egyptian depository receipt (EDR). The company is working with EFG Hermes and the Bank of New York Mellon to arrange the issue later this year.

RusHydro lists GDRs on LSE

RusHydro, the world’s largest publicly traded hydro generational company, has listed on the London Stock Exchange (LSE), making it the first GDR listing on the LSE since February. Bank of New York Mellon is the depository bank.

Banks race to raise billions in new capital

US banks are scrambling to raise billions of dollars in equity, in order to pay back funds they have borrowed from the US government. Investors, meanwhile, have regained faith in financial stocks.

Depository Receipt Roundtable: A reliable business in unreliable times

Depository receipts have proven to be a reliable business even in these volatile times. Indeed, trading on GDRs is actually up 87% this year, even though new issuance is dramatically down on 2007.
emeafinance gathered several of the top institutions from the cosy depository receipt market together to talk about how their businesses are faring, and found them in a relatively positive mood: headcounts are steady in their departments, revenues are also relatively steady, and even if the primary DR market is not that active, the outlook is good in 2009 for new issues from Russia, Sub-Saharan Africa, and the Middle East.
Other issues raised include: changes to SEC regulation for depository receipts, which looks set to provide a major boost to the GDR and ADR market; the rise of local listings in markets like Dubai and Moscow, and how much of a challenge that poses for the LSE’s dominance; and the extent to which the EMEA region is likely to be dragged down by the recession in western markets.

Riding the MENA wave

Egypt’s reformist government is grappling with the dilemma of fighting inflation while cutting a growing deficit. However, in the capital markets, Egyptian companies are expanding and becoming MENA regional champions. Julian Evans reports from Cairo.

In 2004, after a decade of poor economic performance, President Mubarak appointed a new government, headed up by Ahmed Nazif, the youngest-ever prime minister of Egypt. Nazif brought in a cabinet of liberal reformers – some from the private sector, such as Rasheed Mohamed, minister of trade and industry, who was formerly CEO of Unilever in Egypt; some from multilaterals, such as Youssef Boutros Ghali, formerly of the IMF; and some from academia, such as Mahmood Mohieldin, minister of investment, who was formerly an economics professor at the University of Cairo, where Nazif also formerly worked.

State takes the lead in Kazakh banking sector

Kazakhstan’s beleaguered banking sector is getting back on its feet, thanks to increased activity by state banks, and growing levels of FDI, report Shayla Walmsley and Julian Evans.

“It’s been a fascinating ride – to see Kazakh banks go from CIS darling to whipping boy,” says Ian McCall, a director at Argo Capital Management.
For several years, the Kazakh banking sector enjoyed a reputation as the best banking sector in the former Soviet Union. It was mainly privately-owned, well-regulated and relatively transparent.
The top Kazakh banks took advantage of their great reputation to borrow abroad. And how they borrowed. At the end of Q1 2008, overseas debt represented 45% of the sector’s liabilities. In 2006 alone, Kazakh banks borrowed US$18bn on the external debt market.

Ghanaian banks reach out for new capital

With a landmark Eurobond tucked under its belt, an accelerating stock market and first oil production just two years away, Ghana is well positioned to tap the new capital required for its banking sector, writes Kevin Godier.

Ghana’s banking industry is eyeing over US$1bn in new capital injections after an eightfold increase in the minimum capital requirement for banks announced in February 2008 by Ghana’s central bank. With almost all banks’ capital laying below the new threshold – lifted by the Bank of Ghana (BoG) from C7mn (US$7.2mn) to C60mn (US$61.9mn) – “the industry as a whole is far short of the new requirement”, says Gregory Kronsten, director, Africa research, at London-based independent research boutique Trusted Sources.

African fund market lifts off

With over 20 new MENA and Sub-Saharan Africa funds set up in the last 18 months, are African stocks getting over-valued? Julian Evans reports.

Two years ago, you could count the number of international funds that invested in Africa, excluding South Africa, on one hand. Although several pan-Africa funds were raised in the mid-1990s, by managers including Morgan Stanley and Barings, most had lost money and struggled to find stocks in which to invest, and closed down after a few years. Only two pan-Africa funds survived and prospered – Blakeney Asset Management, managed by Miles Morland, and Emerging Market Management, managed by John Niepold.
In the last 18 months, however, over 15 new funds have been set up to invest in African stocks. Six new funds were launched or announced in May and June alone.

Hungary's government hangs on

Despite the collapse of the ruling coalition, investors are hopeful the Hungarian government can stick to its fiscal austerity plans and weather the global credit crunch, writes Kester Eddy in Budapest.

The right-wing opposition and its supporting media in Hungary love the word ‘crisis’; they have been using, or misusing it for years in their regular analysis of the government’s performance, highlighting, for example, economic growth of just 1.3% last year, the lowest for over a decade and inflation pushing towards 7%.

emeafinance 2008 awards

emeafinance's 2008 awards sought to recognise the best banks, teams, and deals in the EMEA region in 2007. The winners are: