JPMorgan Chase & Co.
Dec 19, 2011

Over $14 Billion Raised By Corporate Issuers Using Depositary Receipts in 2011; DR Trading Volume Hits New Record While Trading Value Increased, According To J.P. Morgan Year in Review Report

Local DRs in Hong Kong Expected to Grow in 2012

NEW YORK, December 19, 2011 - Despite difficult market conditions driven by sovereign debt concerns in Europe, slowing economic growth concerns in the U.S., and rising inflation in emerging markets, depositary receipts (DRs) remained resilient in 2011 with 54 issuers raising over $14 billion via DR IPO or follow-on offerings, according to J.P. Morgan's DR 2011Year in Review report. In addition, DR investors drove trading volumes to record levels in the first 11 months of 2011.

While tough market conditions forced several issuers to put off their capital raising plans until 2012, 40 new issuers raised $7.1 billion in the first 11 months of 2011 through IPO listings in New York, London, Luxembourg, Hong Kong and Singapore, as compared to 72 issuers raising $6.9 billion in the same period of 2010. In addition, 14 existing issuers raised $7.5 billion via follow-on offerings in the first 11 months of 2011 compared to 21 issuers raising $13.4 billion during the same period in 2010.  "BRIC" countries (Brazil, Russia, India and China) continued to dominate capital raising, accounting for more than 76% of IPO capital raised and 70% of follow-on capital raised. The DR IPO markets in China and India had 13 and 17 IPOs respectively, nearly half their record 29 and 32 IPOs in the first 11 months of 2010.  

DR trading volume hit a new record, increasing 16% in the first 11 months of 2011 compared with the same period of 2010. The volume of DRs traded in the first 11 months of 2011 was 160 billion DRs versus the same period in 2010 when volume was 138 billion DRs. The value of DRs traded in the first 11 months of 2011 was $3.6 trillion compared with $3.2 trillion in the same period of 2010, reflecting a 12% increase even as the MSCI World Index and MSCI Emerging Market Index fell 8% and 20% respectively during this period.

"The year-on-year growth in DR trading volume and value shows the continued popularity of depositary receipts with issuers and investors even during a challenging year in the global capital markets," said Dennis Bon, global head of J.P. Morgan's DR business. "It's also encouraging that local DRs in markets such as Hong Kong and Brazil continued to expand in 2011 while early-stage markets in the Middle East, Nigeria and Mongolia prepare for expected growth in 2012."

Key findings from J.P. Morgan's "Depositary Receipts Market 2011 Year in Review" report include:

A Year of Firsts

2011 saw J.P. Morgan launch two groundbreaking programs on the Hong Kong Stock Exchange. In April, SBI Holdings of Japan raised $207 million in the first ever capital raising event via Hong Kong Depositary Receipts (HDRs). In December the first ever DR program for a U.S. registered entity was established for the luxury apparel designer Coach.

J.P. Morgan worked very closely with SBI and Coach, as well as with the Hong Kong Stock Exchange, regulators and intermediaries in Hong Kong and overseas to execute these deals. The listings are a testament to the firm's global capabilities and long-held tradition of innovation and product development.

Themes to Watch in 2012

IPO Capital Raising: A steady increase in DR capital-raising from emerging markets is expected as companies continue to access capital in the U.S., Western Europe, and Asia to meet their funding requirements.

Local DRs: In 2012, some local DR structures should continue to evolve. Local DRs are structured to better tap equity investors in new markets, providing local currency-denominated investment vehicles in markets such as Hong Kong, Brazil, India, Taiwan and Russia.

J.P. Morgan Continues DR Industry Leadership

Having created the first-ever ADR in 1927, J.P. Morgan continued its industry innovation and leadership in 2011.

To view the full J.P. Morgan "DR Market - 2011 Year in Review" report, please visit http://www.jpmorgan.com/visit/2011dryearinreview. For market information on DRs and international equities go to J.P. Morgan's award-winning web site www.adr.com. For more information on J.P. Morgan's DR services please visit http://www.jpmorgan.com/visit/adr.

About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.3 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

Neither the HDRs, nor the Hong Kong Depositary Shares ("HDSs") evidenced thereby have been or will be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be re-offered, resold, pledged or otherwise transferred in the United States or to, or for the account of, a "U.S. person" (within the meaning of Regulation S promulgated under the Securities Act), unless the securities are registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and hedging transactions involving the HDRs or the HDSs may not be conducted unless in compliance with the Securities Act.