Citibank bullish about Level 1 ADR programs

The government’s move to authorize listed companies to participate in the issuance of non-capital-raising American depositary receipts, also known as Level 1 ADRs, may draw more than NT$100 billion (US$3.23 billion) in capital to the nation’s equity market in the long term, Citibank said yesterday.

The Financial Supervisory Commission (FSC) and the Taiwan Stock Exchange last month allowed the nation’s publicly traded companies to issue non-capital-raising depositary receipts that are traded on over-the-counter markets overseas, in a bid to improve the shareholder structure and liquidity of local listed firms.

“The Level 1 ADR program is the most cost-effective way for a foreign company to have its equity traded in the US and access the incremental pool of capital available for US dollar-denominated listings,” Beate Melten, global head of IR Advisory Depositary Receipt Services at Citibank, told a press briefing in Taipei.