ADRs and GDRs - International Depository Receipts in Frontier Markets

King-makers in frontier markets


The rise of depository receipt programs has affected both local emerging markets and international investors. Local emerging market issuers have found a quick and painless entry into the investable universe of global equities, and therewith absorbed many of the benefits, such as higher liquidity and thinner bid-ask spreads, which are characteristic of widely traded instruments. For the investor, depository receipt program-sponsors have rolled out the red carpet to less dedicated international fund managers, who in pre-depository receipt times, would not have ventured into many countries’ markets of which their portfolios now contain depository receipts backed by local shares (see chart 8.0.).1


Abnormal Return Equity Market Share Price Private Placement Local Share 
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© Kluwer Academic Publishers 1999

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