Posted On: 05/06/2014 11:23:13 AM
Post# of 56323
A GDR is very similar to an ADR and I just happen to own ALU ADR's which is short for American depositary receipt! It's basically 1 receipt equals 1 share of the company or right to 1 share of the comapny and those ADR's are actually owned by a bank same as a GDR.
In short your buying the right to a share thru the bank who I believe actually owns the shares. Since ALU is now a foreign company they can't sell shares on a US exchange so a bank comes along and they purchase the shares thru a foreign branch and then sell them to yourself as an ADR.
At the end of the day it looks like share in your account and they trade just like shares. The only difference is that charge you a .002% fee on a transaction and a yearly fee which is also very insignificant. Of course they call that a maintenance fee!
By doing that a company makes it's stock available to world wide investors.
In short your buying the right to a share thru the bank who I believe actually owns the shares. Since ALU is now a foreign company they can't sell shares on a US exchange so a bank comes along and they purchase the shares thru a foreign branch and then sell them to yourself as an ADR.
At the end of the day it looks like share in your account and they trade just like shares. The only difference is that charge you a .002% fee on a transaction and a yearly fee which is also very insignificant. Of course they call that a maintenance fee!
By doing that a company makes it's stock available to world wide investors.
(0)
(0)Scroll down for more posts ▼
