Tapping International Equity Markets Through Depository Receipts : Lessons from the Telecoms Sector
Ongoing privatization and financial liberalization in emerging economies have let to continuous growth in the number of depository receipt offerings from these countries. Asian and Latin American companies have been the biggest source of offerings....
| Main Authors: | , |
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| Format: | Viewpoint |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/1998/04/441742/tapping-international-equity-markets-through-depository-receipts-lessons-telecoms-sector http://hdl.handle.net/10986/11555 |
| Summary: | Ongoing privatization and financial
liberalization in emerging economies have let to continuous
growth in the number of depository receipt offerings from
these countries. Asian and Latin American companies have
been the biggest source of offerings. The main advantages of
depository receipts stem from the greater market depth and
liquidity offered by international capital markets:
telecommunications companies are sometimes too big for local
markets to absorb, and more active trading attracts a wider
shareholder base, implies continuous evaluation of a
company's value, and increases management's
accountability for a company's financial performance.
International offerings also enhance the legitimacy of
shares because companies must comply with transparent
accounting rules and strict disclosure standards in the host
market. Experience has shown that to guard against failure
of a depository receipt issue, much effort needs to be put
into choosing the right type of depository receipts,
marketing the issue, forecasting investor demand, and
determining the share price. |
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