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Year-End 2014 Report
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Welcome
Citi Depositary Receipts Year-End 2014 Report
Looking back at 2014, we reflect on a year of many challenges — intense pressure on the global
economy as a result of monetary policy decisions, commodity price fluctuations, a resurgence
of economic challenges in the Eurozone and slowing growth overseas. At the same time, we
saw a strong recovery in the U.S. equity markets, which pushed global depositary receipt (DR)
capital raising activity to over $37 billion for the year. Total DR capital raising represented the
highest level since 2007 and was up more than three times from 2013 levels. China was at the
forefront of initial public offering (IPO) issuances, featuring Alibaba Group’s historic $25 billion
IPO on the NYSE and JD.com’s $2 billion IPO on NASDAQ. In terms of the number of new DR
capital raising programs, 15 Chinese companies came to market, accounting for 58% of the
total number of global issuers that accessed the DR IPO market. The significant increase in
DR capital raising transactions is a testament to the demand and relevance of the depositary
receipt product in today’s capital markets.
In addition, we witnessed groundbreaking DR events in 2014, as regulators in various countries
were keen to tap into increased investor demand for international equities by liberalizing
regulations for depositary receipts. In India, the M.S. Sahoo Committee advised easing
depositary receipts regulations to allow for the creation of OTC Level I ADRs in both sponsored
and unsponsored form. Taiwan followed suit, allowing the creation of OTC traded non-capital
raising ADRs. Similarly, Romanian officials changed regulations to permit local exchange-listed
companies to utilize DRs in the European Union for secondary offerings and non-capital raising
listings. Countries continue to see the benefits of depositary receipts and are easing regulations
for the establishment of different depositary receipt programs to attract foreign investments.
According to the U.S. Federal Reserve, as of the third quarter of 2014, U.S. investment in non-
U.S. equities was $6.6 trillion, up more than 10% from the same period in 2013. Furthermore,
overall equity funds witnessed a net inflow of $46.5 billion, of which $80.3 billion flowed into
world equity funds, while U.S. domestic funds saw an outflow of $33.8 billion. This positive
trend was also reflected in the liquidity of DR programs, as DR trading volumes increased by
8.7 billion shares, or 6%, highlighting investor appetite for increased international exposure.
Demand for international equities was also evident in the fact that the pool of unsponsored DR
programs expanded to over 1,600. We anticipate this growing trend to continue in 2015.
We expect the strong U.S. IPO market momentum to carry into 2015 as the U.S. economy
continues to improve and the emerging economies continue to struggle. In turn, the pipeline of
companies seeking to access the cross-border IPO market will likely remain active in 2015, as
favorable regulations and regional market performances continue to fuel this rising trend. We
anticipate strong cross-border IPO participation from not only Asian issuers, but also Eastern
European issuers seeking to expand their capital base. Overall, depositary receipts will continue
to be a leading access product for investors seeking diversification and a facilitated means of
cross-border investing in the coming year.
Citi Depositary Receipt Services looks forward to continuing to provide issuers, investors and
intermediaries with cross-border solutions in the global capital markets. We hope you gain
valuable insights from our Year-End 2014 Report.
For your convenience, Citi’s Depositary Receipt Services reports are available online.
To download current and previous issues, visit our website (www.citi.com/dr).
Nancy Lissemore
Managing Director
Global Head of Depositary
Receipt Services