JPMorgan Chase & Co.
Dec 21, 2010

Depositary Receipts Maintain Popularity with Issuers and Investors in 2010, According to J.P. Morgan Year in Review Report

BRIC Countries Continue to Dominate Depositary Receipt Capital Raising
Local Variations of Depositary Receipts Developed in Hong Kong, Brazil, India and Russia

NEW YORK, December 21, 2010 - Despite economic uncertainty and volatility in the global equity markets in 2010, depositary receipts (DRs) remain popular with both issuers and investors, according to J.P. Morgan's DR 2010 Year in Review report.

In the first 11 months of 2010, trading value increased 26% compared with the same period of 2009. The value of DRs traded in the first 11 months of 2010 was $3.2 trillion compared with $2.5 trillion in the same period of 2009. Trading volume for the first 11 months in 2010 was 138 billion DRs versus the same period in 2009 when volume was 124 billion DRs, an 11% increase.

Issuers raised more than $20.3 billion through primary and follow-on DR offerings in the first 11 months of 2010, compared to $17.1 billion in the same period of 2009. IPO capital-raising saw 72 new issuers raise $6.9 billion in the first 11 months of 2010 through IPO listings in New York, London, Luxembourg, Paris, Singapore or through private placements, as compared to 22 issuers raising $7.9 billion in the same period of 2009. "BRIC" countries (Brazil, Russia, India and China) accounted for 90% of total capital raised. The DR IPO markets in China and India bounced back with 29 and 32 IPOs, respectively, a new record. 2010 also saw the first DR IPOs from Russia and the Middle East since the second quarter of 2008.

"Key DR markets remained resilient in 2010. As issuers from emerging markets continue to access the U.S., Western European and Asian capital markets, we expect a steady increase in capital-raising via DRs," said Claudine Gallagher, global head of J.P. Morgan's DR business. "We've seen markets in Hong Kong, Brazil, India and Russia facilitate the creation of new local DR programs and we expect that trend to continue in 2011."

Other key findings from J.P. Morgan's "Depositary Receipts Market 2010 Year in Review" report include:

A Year of Firsts

Themes to Watch in 2011

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 2011, "local DRs" 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 expects more issuers from China and Singapore to list Taiwan DRs on the Taiwan Stock Exchange. Regulatory changes in China in the next 12 to 24 months may allow foreign companies to list on China's stock exchanges.

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 2010.

J.P. Morgan launched the first Hong Kong Depositary Receipt (HDR) for Vale of Brazil. This launch reinforced J.P. Morgan's legacy of innovation and brought the world's second-largest mining company, and the largest producer and exporter of iron ore, to the Hong Kong market. J.P. Morgan worked very closely with Vale, the Stock Exchange of Hong Kong, regulators and intermediaries in Hong Kong and overseas to make this happen. This listing is a testament to J.P. Morgan's global capabilities.

Petrobras of Brazil successfully launched a $70bn follow-on stock offering, of which $10bn was in ADR form, the largest-ever DR capital-raising event in history. J.P. Morgan was the depositary bank for this record-breaking transaction. The success of this $10bn ADR offering, together with the largest-ever $6.4bn GDR IPO for Russia's Rosneft in 2006, demonstrates J.P. Morgan's ability to execute large and complex DR transactions.

Programs managed by J.P. Morgan, on average, continue to trade at higher values and are significantly more liquid than those of other depositary banks. J.P. Morgan's sponsored DR programs see average annual trading value of $4.2 billion (versus industry average of $1.9 billion) on annual volume per program of 168 million DRs (versus industry average of 81.5 million DRs).

Additional 2010 highlights include:

To view the full J.P. Morgan "DR Market - 2010 Year in Review" report, please visit http://www.jpmorgan.com/visit/2010dryearinreview. 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 $2.1 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.