Page 32 - Demo

%u062c%u0645%u064a%u0639 %u0627%u0644%u062d%u0642%u0648%u0642 %u0645%u062d%u0641%u0648%u0638%u0629 %u0640 %u0627%u0625%u0644%u0639%u062a%u062f%u0627%u0621 %u0639%u0649%u0644 %u062d%u0642 %u0627%u0645%u0644%u0624%u0644%u0641 32 %u0628%u0627%u0644%u0646%u0633%u062e %u0623%u0648 %u0627%u0644%u0637%u0628%u0627%u0639%u0629 %u064a%u0639%u0631%u0636 %u0641%u0627%u0639%u0644%u0647 %u0644%u0644%u0645%u0633%u0627%u0626%u0644%u0629 %u0627%u0644%u0642%u0627%u0646%u0648%u0646%u064a%u0629The most famous types of cross-listing are American Depository Receipts (ADR) and Global Depository Receipts (GDR).The introduction of GDRs was in 1927, when J.P. Morgan created Depository Receipts as a result of restrictions preventing American investors from investing directly in the UK stock markets. To overcome these restrictions on foreign investment, and to allow US investors to invest in foreign securities, the US Securities and Exchange Commission (SEC) in 1955 established the legal form of Depository Receipts that are traded in US markets11 (Yang, 2017).1-American Depository Receipts (ADR) 12:ADRs are foreign stocks that often trade on U.S. exchanges. ADRs are receipts that represent the number of foreign shares that are deposited at a U.S. bank. This U.S. bank serves as a transfer agent for the ADRs, which are traded on the listed exchanges in the United States or in the OTC market. ADRs are denominated in U.S. dollars, and dividends are also paid in U.S. dollars., The ADRs are registered securities.2- Global Depository Receipts:The difference between GDRs and ADRs is that ADRs are traded in the US markets, while GDRs are traded in international markets other than the US market. GDRs are transferable securities issued by global depositary banks. They are traded in bothU.S. Dollars and Euros.Example1:CIB Egypt trades as ADR on the American Stock Market (one underlying CIB share equals 1 ADR). Yesterday, the price of CIB shares closed in Egypt at EGP 222, and the spot exchange rate was $0.053/EGP 1.00.1- What is the no-arbitrage US dollar price of one ADR?2- If one CIB ADR was trading at $10 when the underlying share was trading in Egypt at EGP 222, what could you do to earn a trading profit, and how much?11 Yang, Ming Jing, 2017, \Vol. 6, No. 4. 12 --Eun, C. S., & Resnick, B. G. (2012). International financial, edition Six, McGraw Hill.