Asia-Pacific Depositary Receipt Capital Raising Activity to Grow in 2011

JP Morgan expects to see continued growth in depositary receipt (DR) capital raising activities across Asia-Pacific, according to its ‘Asia-Pacific Year in Review 2010’ DR report.

The annual report, which includes analysis of DR trends over the past 12 months along with an outlook on the coming year, highlighted a number of key areas in which activity was expected to rise. These included Hong Kong’s HDR market as a destination for global companies seeking to tap Asia’s growth story; the further development of emerging markets within Asia-Pacific in terms of capital raising activities; and an increase in the number of issuers from China and Singapore seeking to list DRs on the Taiwan Stock Exchange.

Kenneth Tse, Asia-Pacific head of JP Morgan’s DR group, said: “With the continued recovery of capital markets globally and an improvement in corporate earnings generally, we’re expecting 2011 to deliver another strong year of growth in the Asia-Pacific depositary receipts space. China and India will undoubtedly remain key players, but we’re also expecting to see some of the smaller markets like Mongolia and Vietnam begin to assert themselves on the global stage over the next 12 to 24 months.”

Tse also noted that the firm expects to see a continued emergence of local market DRs across Asia-Pacific, as inbound global enterprises seek to better capitalise on the region’s growth story.

“We think that local market DRs will continue to evolve quickly, and it is a segment that offers significant growth opportunities going forward. Local market DRs offer companies with significant operations in Asia-Pacific better access to a growing base of investors within each market – investors who are seeking local currency denominated investment vehicles and exposure to a wider range of international names,” he added.


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