DR IPO Capital Raising in APAC Up Fourfold in 2009;
DR Liquidity Remains High in the Region, Near the Record Levels of 2008
J.P. Morgan Leads DR IPO Capital Raising in APAC, with a 44% Market Share in 2009;
Selected as Depositary Bank for Three of the Region's Top Five ADR IPOs in 2009
Hong Kong, February 11, 2010 - In a year of gradual economic recovery, the issuance and trading of depositary receipts (DR) in 2009 remained strong in the Asia-Pacific region, especially in key markets such as China, India and Taiwan, according to J.P. Morgan's inaugural Depositary Receipt APAC Year in Review 2009.
In 2009, IPO capital raising in the region through DRs was four times higher than in the previous year, as 26 new issuers raised over $4 billion, compared with 18 issuers raising $871 million in 2008. DR liquidity also remained extremely high, with 36 billion DR shares traded on APAC DR programs in 2009, close to the record 38 billion shares traded in 2008.
The majority of DR IPO capital raising in 2009 were from APAC, with 26 issuers from the region overall, compared to 28 globally.
"The depositary receipt has proven its resilience as a cross border capital raising instrument in a volatile market," said Kenneth Tse, Asia Pacific head of J.P. Morgan's Depositary Receipts business. "As the global financial crisis subsides, the depositary receipt will play an even bigger role as a capital raising tool in funding the growth of the emerging APAC economies."
Other key findings from J.P. Morgan's "Depositary Receipts - APAC Year in Review 2009" report include:
Unsponsored DR Programs
There continued to be a rapid increase in unsponsored ADR programs in 2009, as global depositary banks continued to create ADR programs, often without investor interest or issuer consent. Since the SEC rule change in October 2008, more than 50 unsponsored programs, mostly from Japan, have been terminated as issuers expressed discontent on depositary banks' establishment of such programs without their consent. J.P. Morgan continued with its collaborative, consultative and transparent approach with the issuer prior to the establishment of unsponsored programs.
Themes to Watch in 2010
J.P. Morgan Continues DR Industry Leadership
J.P. Morgan launched the first depositary receipt program in Asia in 1961 for Sony and serves as depositary bank for leading companies throughout the region. With a 44% market share in DR capital raising in 2009, J.P. Morgan worked on many of the key deals in APAC, confirming its status as market leader.
In APAC, J.P. Morgan acted as the depositary bank for three of the five largest ADR IPOs in 2009, including the $1 billion IPO of Shanda Games. This complements J.P. Morgan's global success in emerging markets, as the bank was also the depositary bank for the largest DR IPO last year, the $4.5 billion New York-listing of Brazil's Banco Santander Brasil.
DR programs managed by J.P. Morgan, both globally and in APAC, are on average more liquid compared to programs managed by its competitors. The average trading value of a J.P. Morgan DR program in APAC is $1 billion and the average trading volume is 74 million shares.
Further recent successes include:
For market information on DRs and international equities, please 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 J.P. Morgan Worldwide Securities Services
J.P. Morgan Worldwide Securities Services is a premier securities servicing provider that helps institutional investors, alternative asset managers, broker dealers and equity issuers optimize efficiency, mitigate risk and enhance revenue. A division of JPMorgan Chase Bank, N.A. (NYSE: JPM), J.P. Morgan Worldwide Securities Services leverages the firm's unparalleled scale, leading technology and deep industry expertise to service investments around the world. It has $14.9 trillion in assets under custody and $5.1 trillion in funds under administration. For more information, go to www.jpmorgan.com/visit/wss.
About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2 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. In Asia Pacific, J.P. Morgan operates through 26 offices in 15 countries and has developed its wholesale banking franchise during a history of almost 160 years in the region. More information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
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