What is the ADR , GDR ?

#1
Hello Friends,I am new in this forum! I am share market student now.

My Question :

What is the ADR & GDR ?

Please help this subject.
 
#2
Hello Friends,I am new in this forum! I am share market student now.

My Question :

What is the ADR & GDR ?

Please help this subject.
You can study a lot on ADR/GDR on net including the full form of these terms. So I'll limit my explanation to following pointers :-
  1. Trading is all about price discovery (in theory).
  2. So a company would like to itself to be valued in more matured markets.
  3. The intermediary hold some of the equity say 5% of the total equity as custodian and issue depository receipts against it.
  4. These receipts are traded in the abroad markets (ADR in America and GDR in London).
  5. Price fluctuation can happen both ways that is an undervaluation in ADR can lead to a slide in domestic market or vice versa.

with regards,
BJ
 
#3
An ADR is American deposit receipts follow th strict norms laid down by SEC(securities exchange commission of America) & GAAP.
GDR is global deposit receipts and traded in london stock exchange and luxemberg stock exchange .
Each receipt represent a claim on the underlying shares. The only difference is the location where they are traded. The below link gives a very good insight to what it is and why it is so:
http://www.raagvamdatt.com/What-is-...pt-ADR-and-Global-Depository-Receipt-GDR/126/
 

Similar threads