Depositary receipts set to shine in era of mega trades

Published: February 2, 2018

Depositary receipts are facing a swell of potentially jumbo sized transactions from markets that are only just now opening to international investors, with regulators and bankers alike trying to decipher the best way to capture the rush of activity.

Companies raised around US$5.5bn in capital via depositary receipts (DR) by the end of the third quarter of 2017 according to Deutsche Bank, and multiple bankers expect this figure to climb to US$10bn by the end of the year. This will be higher than the more than US$8bn that was raised in 2016, according to BNY Mellon figures.

However, the domicile of companies looking to use depositary receipts is changing.

“New markets are coming online and the depositary receipt product can be one of the main considerations,” Scott Pollak, managing director, global product and capital market solutions head, depositary receipt services at Citi told EMEA Finance. “There are markets that are yet to open up to the product and that’s exciting for us.” 

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