Expert Chaslau Koniukh
  • Companies
  • Global investment
  • Investors
  • Terminology
  • Economy
  • Stock Market
  • World exchanges
  • Tech and Marketing
types of depository receipts
Market terminology

Types of depositary receipts: overview of instruments for acquiring shares

11.08.2021
2 min read

What types of depositary receipts are used for the Russian market

Diversification is one of the important approaches in investor activity. It is used between assets, and afterwards it is switched to inter-industry. Some specialists also use diversification between countries, but it has a number of difficulties related to accessing the foreign market. Various types of depositary receipts have been introduced to facilitate transactions.
This paper is a financial instrument, which makes it possible to buy shares of foreign companies on the stock exchange of one’s own country. Most often, the issue of depositary receipts is engaged in large investment banks, and the latter must own the securities of the company for which the issue is made.
This type of securities became a way out of the situation when firms in one country are forbidden to place their shares on foreign stock exchanges. In order to get a receipt, one must submit an application to the broker through whom the purchase will be made. As the value of the stock increases, so does the price of the receipt.
There are different types of depositary receipts, but for Russian investors three main groups are important – American, global and Russian.
The first type, ADRs, are used for US exchanges and cover shares of issuers from other countries. The securities are denominated in dollars. Shares of Russian companies are not popular on the American floors, there are only two receipts – for MTS and Mechel.
Global Depositary Receipts or GDRs are instruments for companies whose shares are listed on several exchanges simultaneously, not including the US exchanges.
Russian depositary receipts or RDRs are issued for securities of foreign companies, which are presented on the local stock market. However, they are not popular in the country, first of all, due to the fact that the segment is underdeveloped. The number of investors on the stock exchanges is rather small, and the Russian market is not interesting for foreign companies.

types of depository receipts

Dividends are paid for shares that are purchased with depositary receipts. The instrument can be issued for a different number of securities.
It should be noted that the price of a receipt may be different from the price of a share on the stock exchange. This is due to the fact that investors from different countries perceive the same information, taking into account the individual peculiarities of their markets or the political situation in the country.
Using depository receipts has a number of advantages, first of all it is an opportunity to earn on the difference in price. Besides, if there are several accounts, it is possible to choose, on which exchange assets are cheaper to buy.
In total, more than a thousand receipts operate in the global market, 68 of them are issued for Russian companies, which are represented on foreign exchanges.

Tags: Market terminology
0
Previous Post Iraqi authorities offer foreign companies to join gas field development Next Post Analysts: how the coronacrisis has changed the positions of major currencies

You Might Also Like

commodity channel index
Market terminology
Commodity channel index: distinguishing features of the CCI
15.01.2023
free float
Market terminology
What is the Free Float coefficient
23.05.2021
trader-11
Market terminology
Clearing: peculiarities and types of the procedure
10.10.2021
golden share
Market terminology
Golden share: an overview of the type of securities
12.03.2023
60/40 strategy
Market terminology
BlackRock: 60/40 strategy has become ineffective for today’s market
30.07.2023
shooting star
Market terminology
Shooting star pattern: distinctive features of the figure
20.11.2022

Recent Posts

  • 1Padmasree Warrior business
    Businesswoman Padmasree Warrior’s career path
    26.09.2023
  • 2Raytheon
    How the Raytheon Company gave the world microwaves and the Patriot system
    24.09.2023
  • 3Forex drawdown
    Forex drawdown and why you shouldn’t be afraid of it
    22.09.2023
  • 4investment in Turkey's steel industry
    Yıldız increases investment in the Turkish steel industry
    20.09.2023
  • 5Abu Dhabi Exchange
    The Abu Dhabi Exchange has created ideal conditions for the IPO of an Adnoc unit
    18.09.2023

Popular Posts

  • Skolkovo analysts: the Russian energy market is suffering losses
  • Analysts: Egypt’s economy to continue falling in 2023
  • Businessman Chuck Feeney: the man who gave the world Duty Free
  • Field of activity of the American Monsanto Company Corporation

Social media

Editor's Picks

Chaslau Koniukh
Analytics

American bankers from JPMorgan and Goldman Sachs advise to invest in gold: review by Chaslau Koniukh.

Spokesperson
17.08.2020
Expert Chaslau Koniukh
Analytics

Chaslau Koniukh on the analysts’ opinion on the key stake size change soon

Spokesperson
18.06.2020
expert Chaslau Koniukh
Analytics

Chaslau Koniukh: Internet trade market in Russia may reach 2.78 trillion rubles.

Spokesperson
30.05.2020
Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh
Analytics

Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh

Spokesperson
16.05.2020

Latest Posts

Padmasree Warrior business
Businesswoman Padmasree Warrior’s career path
26.09.2023
Raytheon
How the Raytheon Company gave the world microwaves and the Patriot system
24.09.2023
Forex drawdown
Forex drawdown and why you shouldn’t be afraid of it
22.09.2023

Chaslau Koniukh

Expert Chaslau Koniukh

Chaslau Koniukh – an expert in marketing and project management, IT consulting, international investments, investor, financial analyst. A commodity trader, private consultant, entrepreneur, lecturer, author of several articles on the stock market.

Popular Posts

  • Skolkovo analysts: the Russian energy market is suffering losses
  • Analysts: Egypt’s economy to continue falling in 2023
  • Businessman Chuck Feeney: the man who gave the world Duty Free
  • Field of activity of the American Monsanto Company Corporation
  • Deposit rates in Russia are losing their relevance as an option to generate income
Expert Chaslau Koniukh
  • Facebook
  • Twitter
  • Instagram
  • Biography

Chaslau Koniukh – an expert in marketing and project management, international investments, financial analyst.

Social media

Menu

  • Biography
  • Companies and corporations
  • Global investment
  • Investors and Entrepreneurs
  • Economy
  • Market terminology
  • Stock Market
  • World exchanges
  • Tech and Marketing
  • Analytics