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{{Short description|Security representing ownership of an underlying number of shares of a foreign company}}
{{Refimprove|date=September 2014}}
{{Refimprove|date=September 2014}}
{{Use dmy dates|date=July 2022}}
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A '''global depositary receipt''' ('''GDR''' and sometimes spelled ''deposit'''o'''ry'') is a general name for a [[depository receipt]] where a certificate issued by a [[depository bank]], which purchases [[Share (finance)|share]]s of foreign companies, creates a [[Security (finance)|security]] on a local [[Stock exchange|exchange]] backed by those shares. They are the global equivalent of the original [[American Depository Receipts|American depository receipts]] (ADR) on which they are based. GDRs represent ownership of an underlying number of [[shares]] of a foreign company and are commonly used to invest in companies from developing or [[emerging markets]] by investors in developed markets.


⚫
A '''global depository receipt''' ('''GDR''' and sometimes spelled ''deposit'''a'''ry'') is a general name for a [[depositary receipt]] where a certificate issued by a [[depository bank]], which purchases [[Share (finance)|share]]s of foreign companies, creates a [[Security (finance)|security]] on a local [[Stock exchange|exchange]] backed by those shares. They are the global equivalent of the original [[American depositary receipt]]s (ADR) on which they are based. GDRs represent ownership of an underlying number of [[shares]] of a foreign company and are commonly used to invest in companies from developing or [[emerging markets]] by investors in developed markets.
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Prices of global depositary receipt are based on the values of related shares, but they are traded and settled independently of the underlying share. Typically, 1 GDR is equal to 10 underlying shares, but any ratio can be used. It is a [[negotiable instrument]] which is denominated in some freely convertible currency.<ref>{{cite web |url=http://www.mbaskool.com/business-concepts/finance-accounting-economics-terms/6678-global-depository-receipt-gdr.html |title=Global Depository Receipt (GDR) |publisher=MBA Skool |accessdate=June 9, 2014}}</ref> GDRs enable a company, the issuer, to access investors in [[capital market]]s outside of its home country.


⚫
Prices of global depositary receipt are based on the values of related shares, but they are traded and settled independently of the underlying share. Typically, 1 GDR is equal to 10 underlying shares, but any ratio can be used. It is a [[negotiable instrument]] which is denominated in some freely convertible currency.<ref>{{cite web |url=http://www.mbaskool.com/business-concepts/finance-accounting-economics-terms/6678-global-depository-receipt-gdr.html |title=Global Depository Receipt (GDR) |publisher=MBA Skool |access-date=June 9, 2014 |archive-date=14 July 2014 |archive-url=https://web.archive.org/web/20140714162938/http://www.mbaskool.com/business-concepts/finance-accounting-economics-terms/6678-global-depository-receipt-gdr.html |url-status=dead }}</ref> GDRs enable a company, the issuer, to access investors in [[capital market]]s outside of its home country.
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Several international banks issue GDRs, such as [[JPMorgan Chase]], [[Citigroup]], [[Deutsche Bank]], [[The Bank of New York Mellon]]. GDRs are often listed in the [[Frankfurt Stock Exchange]], [[Luxembourg Stock Exchange]], and the [[London Stock Exchange]], where they are traded on the International Order Book (IOB).

⚫
Several international banks issue GDRs, such as [[JPMorgan Chase]], [[Citigroup]], [[Deutsche Bank]], and [[The Bank of New York Mellon]]. GDRs are often listed in the [[Frankfurt Stock Exchange]], [[Luxembourg Stock Exchange]], and the [[London Stock Exchange]], where they are traded on the International Order Book (IOB).


==Characteristics==
==Characteristics==
# it is an unsecured security
# It is an unsecured security
# it may be converted into number of shares
# It may be converted into number of shares
# interest and redemption price is public in foreign agency
# Interest and redemption price is public in foreign agency
# it is listed and traded in the [[stock exchange]]
# It is listed and traded on the [[stock exchange]]
# Holders of a GDR do not carry any voting rights


==Usage==
==Usage==
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* [[Depositary receipt]]
* [[Depositary receipt]]
* [[American Depositary Receipt]]
* [[American Depositary Receipt]]
* [[European Depositary Receipt]]
* [[European depositary receipt]]
* [[Luxembourg Depositary Receipt]]
* [[Indian Depository Receipt]]
* [[Indian Depository Receipt]]
* [[Cross listing]]
* [[Cross listing]]
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==External links==
==External links==
* [https://adr.db.com Deutsche Bank's depositary receipt website]
* [https://adr.db.com Deutsche Bank's depositary receipt website]
* [http://www.gopubliceu.com/globaldepositoryreceipt.html Global depository receipts]
* [https://web.archive.org/web/20101213005353/http://www.gopubliceu.com/globaldepositoryreceipt.html Global depository receipts]
* [http://adrbnymellon.com BNY Mellon ADRs]
* [http://adrbnymellon.com BNY Mellon ADRs]
* [https://web.archive.org/web/20101208230707/http://gopubliceu.com/ Frankfurt Stock Exchange]
* [https://web.archive.org/web/20101208230707/http://gopubliceu.com/ Frankfurt Stock Exchange]

Latest revision as of 09:40, 8 June 2024

A global depository receipt (GDR and sometimes spelled depositary) is a general name for a depositary receipt where a certificate issued by a depository bank, which purchases shares of foreign companies, creates a security on a local exchange backed by those shares. They are the global equivalent of the original American depositary receipts (ADR) on which they are based. GDRs represent ownership of an underlying number of shares of a foreign company and are commonly used to invest in companies from developing or emerging markets by investors in developed markets.

Prices of global depositary receipt are based on the values of related shares, but they are traded and settled independently of the underlying share. Typically, 1 GDR is equal to 10 underlying shares, but any ratio can be used. It is a negotiable instrument which is denominated in some freely convertible currency.[1] GDRs enable a company, the issuer, to access investors in capital markets outside of its home country.

Several international banks issue GDRs, such as JPMorgan Chase, Citigroup, Deutsche Bank, and The Bank of New York Mellon. GDRs are often listed in the Frankfurt Stock Exchange, Luxembourg Stock Exchange, and the London Stock Exchange, where they are traded on the International Order Book (IOB).

Characteristics

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  1. It is an unsecured security
  2. It may be converted into number of shares
  3. Interest and redemption price is public in foreign agency
  4. It is listed and traded on the stock exchange
  5. Holders of a GDR do not carry any voting rights

Usage

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If for example an Indian company which has issued ADRs in the American market wishes to further extend it to other developed and advanced countries such as in Europe, then they can sell these ADRs to the public of Europe and the same would be named as GDR. GDR can be issued in more than one country and can be denominated in any freely convertible currency.

See also

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References

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  1. ^ "Global Depository Receipt (GDR)". MBA Skool. Archived from the original on 14 July 2014. Retrieved 9 June 2014.
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