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Strong Growth In American And Global Depositary Receipts Anticipated In 2007


Record Liquidity and Investment in Depositary Receipts in 2006
Major shift to Brazil, China, India and Russia Seen

New York, January 24, 2007 – Strong growth in liquidity and capital raised from American and Global Depositary Receipts is anticipated in 2007, matching or exceeding 2006’s record-setting levels, according to JPMorgan’s Depositary Receipts Group.

A Depositary Receipt (DR) represents the local shares of a company and can be structured as either an American Depositary Receipt (ADR) or a Global Depositary Receipt (GDR). Since JPMorgan established the first DR program in 1927, DRs have gained widespread popularity as a tool for companies to access cross-border capital and as an investment option to facilitate global exposure.

JPMorgan’s Depositary Receipts Group said the trends to watch in 2007 include:

* Dominance of GDRs, which typically list on London or Luxembourg exchanges, instead of ADRs which typically list on U.S. exchanges. This is due in part to increased reporting and compliance regulations for global issuers as a result of U.S. Sarbanes-Oxley requirements.

* Shift in center of gravity in DR markets “south and east,” with “BRIC” (Brazil, Russia, India, and China) countries dominating new issues.

* Increased use of specialized DRs and DR-based investment and fund vehicles (e.g., DR structures based on debt or preferred instruments).

“The Depositary Receipt continues to be the vehicle of choice for issuers to efficiently access global capital markets and for investors to gain global equity exposure,” said Claudine Cardillo-Rivot, global head of JPMorgan’s Depositary Receipts business.

In 2006, Depositary Receipts saw record liquidity with trading volumes up 22% to 57 billion shares and trading values rising 58% to $1,657 billion over 2005. In 2007, JPMorgan anticipates continued growth, especially in countries such as Brazil, China, India and Russia (BRIC). These countries are experiencing growth at greater than global averages, creating new world-class companies that will attract DR investment and accelerate cross-border liquidity.

“JPMorgan is a premier provider of Depositary Receipt Services, and is the sole depositary bank for the largest-ever DR initial public offering in the history of the industry. We are now also the number-one provider in Latin America and intend to be the pre-eminent provider around the world,” Cardillo-Rivot said.

From a regional perspective, there were several notable trends in 2006 including:

* In Asia, the GDR was dominant, particularly in Korea, Taiwan and India. 2006 also saw the rise of new markets, such as Pakistan and Vietnam. Main driving forces were privatization, and increasing appetite for emerging market exposures.

* In Europe, DR capital raisings were dominated by Russian issuers, with Russian oil and gas giant Rosneft Oil Company JSC raising approximately $6.4 billion in DR form, the largest-ever offering of DRs. Another 12 Russian issuers raised capital in DR form, the dominant sectors being metals & mining, and oil and gas.

* In Latin America, the dominant market was Brazil, which represented almost two-thirds of new DR entrants for the region. Renewed interest in Argentina was also evident, as 2006 brought about the first internationally-placed IPOs (initial public offering) from the country since 2001.

For a copy of JPMorgan’s white paper on Depositary Receipts go to For more information on DRs visit JPMorgan’s award-winning Web site

JPMorgan’s DR business is part of JPMorgan Worldwide Securities Services.

About JPMorgan Worldwide Securities Services

JPMorgan Worldwide Securities Services, a division of JPMorgan Chase Bank, N.A., is a global industry leader with $13.9 trillion in assets under custody. JPMorgan provides innovative custody, fund accounting and administration and securities services to the world’s largest institutional investors, alternative asset managers and debt and equity issuers. JPMorgan Worldwide Securities Services leverages its scale and capabilities in more than 90 markets to help clients optimize efficiency, mitigate risk and enhance revenue through a broad range of investor services as well as securities clearance, collateral management and alternative investment services.

About JPMorgan Chase

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $1.4 trillion and operations in more than 50 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset and wealth management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its JPMorgan and Chase brands. Information about the firm is available at


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