Article

GDR
September 10 , 2012

Global Depository Receipt (GDR) is similar to its cousin ADR. GDR is a certificate issued by an international bank that represents a fixed number of shares of a foreign company listed on stock exchanges of the country of origin. The bank buys shares of the foreign company in bulk and issues certificates that are listed in various stock exchanges. GDRs are mostly issued by companies from emerging economies to tap mature markets like the US and UK.

GDRs are traded like domestic stocks. They are quoted in US dollars and dividends are paid to investors in dollars. Their prices are linked to its price in the home country exchange but they are settled independently of them. Majority of the GDRs are listed on Luxembourg Stock Exchange; some are listed London Stock Exchange and Singapore Stock Exchange. When GDRs are issued by a bank or depository based in the US they are known as ADRs.

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