First Half 2004 Depositary Receipt Capital Raising Reaches $2.5 Billion with Continuing Momentum Driven by Asia/Pacific
Emerging market activity underlies volume increase of 42% and trading value increase of 87% over 1st Half of 2003
New York, June 23, 2004 – 2004 –- Citigroup (NYSE:C) today reported that year-to-date capital raised in the form of American Depositary Receipts (ADRs) by non-U.S. companies through June 23rd was $2.5 billion, with Asian companies accounting for 100% of the total. This momentum continues a trend seen in the second half of 2003, with emphasis on Asian companies in the technology and telecommunications sectors. The $2.5 billion figure represents a 502% increase over the same period in 2003, when markets were suppressed by the SARS virus crisis in Asia and a period of market uncertainty globally.
Taiwan’s AU Optronics Corp. topped the list, raising $480.0 million. Other sizeable capital raisings included transactions by Semiconductor Manufacturing International Corp. (SMIC, China, $475.4 million), plus HannStar Display (Taiwan, $301.6 million), plus ProMOS Technologies (Taiwan, $271.4 million), China Telecom (China, $251.1 million), United Microelectronics (Taiwan, $204.3 million), Macronix International (Taiwan, $173.3 million), Chunghwa Picture Tubes (Taiwan, $132.0 million), Tom Online (Hong Kong, $91.3 million), and Associated Cement Companies (ACC, India, $40.0 million).
“Overall, the continued momentum in capital raisings for Asian companies represents a trend that’s going to continue,” said Sanjeev Nanavati, Managing Director of Citigroup Depositary Receipt Services. “We are particularly pleased that Citigroup was the depositary of choice for companies generating 46% of the capital raised using depositary receipts (DR) in the first half of 2004.”
May 2004 year-to-date DR trading volume was 16.9 billion shares, up 42% over the same period last year, and trading value was $396.6 billion, an 87% increase. By contrast, for the U.S. market (excluding DRs), May 2004 YTD trading volume was 344 billion shares, up 18% from last year, while May 2004 YTD value is projected to be $8.8 trillion, an increase of 40% from 2003. This increased investor appetite for non-US stocks was reflected in a 28 percentage point spread between the 61% YOY increase in U.S. investment in non-US equities between 1Q2003 and 1Q2004, from $1.27 trillion to $2.04 trillion, and the 33% YOY increase in the S&P 500 Index over the same period, from 848.2 to 1,126.2.
The 42% growth in trading volume was primarily driven by the Asia/Pacific region, but all regions showed significant year-on-year gains.Growth in DR Trading Volume Worldwide (Volume in millions)
| Region | May 2003 YTD | May 2004 YTD | % Change |
| Asia/Pacific | 2,127 | 4,500 | 111.6% |
| Latin America | 1,669 | 2,400 | 43.8% |
| Western Europe | 6,845 | 8,578 | 25.3% |
| CEEMEA* | 1,258 | 1,418 | 12.8% |
| Total World | 11,899 | 16,895 | 42.0% |
*Central, Eastern Europe, Middle East & Africa
The 87% growth in trading value was paced by the emerging markets. Western Europe also had a strong 51% increase over last year.
| Region | May 2003 YTD | May 2004 YTD | % Change |
| Asia/Pacific | 27,518 | 94,312 | 242.7% |
| Latin America | 25,020 | 57,841 | 131.2% |
| CEEMEA* | 23,809 | 39,290 | 65.0% |
| Western Europe | 136,230 | 205,160 | 50.6% |
| Total World | 212,578 | 396,602 | 86.6% |
*Central, Eastern Europe, Middle East & Africa
Greatest Increases Seen in Technology and Media Sectors
Industry sector analysis reveals that the strongest growth in DR trading value worldwide over 2003 occurred in Technology, with a 176% gain to $51.3 billion, Media, with a 145% gain to $16.1 billion, and Chemicals & Pharmaceuticals, with a 124% gain to $63.1 billion. The large Banking sector had a 17% YOY decline in trading value.
DR Trading by Sector
| Sector | Value May 2004 YTD (US$ billions) |
% Change in Value over May 2003 YTD | Volume May 2004 YTD (Billions) | % Change in Volume over May 2003 YTD |
| Technology | 51.3 | 176% | 3.4 | 82% |
| Media | 16.1 | 145% | 0.5 | 79% |
| Chemicals and Pharmaceuticals | 63.1 | 124% | 2.3 | 85% |
| Business & Public Services | 18.8 | 111% | 0.8 | 34% |
| Telecommunications | 95.3 | 97% | 4.4 | 27% |
| Mining and Metals | 26.9 | 76% | 1.3 | 23% |
| Energy | 62.1 | 63% | 1.5 | 34% |
| Banking | 17.1 | -17% | 0.7 | -3% |
| Sub-Total | 350.7 | 90% | 14.9 | 44% |
| Total All Sectors | 396.6 | 87% | 16.9 | 42% |
Appetite for Non-U.S. Equities Continues to Grow Among U.S. Investors
According to the U.S. Federal Reserve, total U.S. investment in non-U.S. equities (both DRs and non-U.S. shares) increased by $91 billion (4.7%) during the first quarter of 2004 to $2.0 trillion, an all time record high. Increasing asset values accounted for $71 billion of the total increase, while net capital inflows accounted for $20 billion.
U.S. Investment in Non-U.S. Equities (DRs and Ordinary Shares)
Net Cash Flow (US$ billions)
| Year | US Investment in Non-US Equities | Change Due to Capital Flows | Change Due to Asset Values | Net Change | % Change |
| 1996 | 1,003 | ||||
| 1997 | 1,208 | 57.6 | 147.4 | 205.0 | 20.4% |
| 1998 | 1,476 | 101.3 | 166.7 | 268.0 | 22.2% |
| 1999 | 2,004 | 114.3 | 413.7 | 528.0 | 35.8% |
| 2000 | 1,853 | 106.7 | (257.7) | (151.0) | (7.5%) |
| 2001 | 1,613 | 109.1 | (349.1) | (240.0) | (13.0%) |
| 2002 | 1,345 | 17.7 | (285.7) | (268.0) | (16.6%) |
| 2003 | 1,949 | 91.3 | 512.7 | 604.0 | 44.9% |
| 1Q2004 YTD | 2,040 | 19.6 | 71.4 | 91.0 | 4.7% |
Citigroup has also found that individual investor appetite for non-U.S. equities continued to grow through self-directed mutual funds. According to the Investment Company Institute, nearly $25 billion flowed into international equity mutual funds (both DRs and non-U.S. shares) during the first four months of 2004, equivalent to 33% of total U.S. equity mutual fund inflows. In 2003, nearly $21 billion flowed into international mutual funds, accounting for 16% of total equity mutual fund inflows.
Growth in Self-Directed Mutual Funds with non-U.S. Equities
(DRs and Ordinary Shares)
Net Cash Flows (US$ billions)
| Fund Type | April 2004 YTD | FY 2003 |
| All Equity Funds | 108.4 | 152.8 |
| Emerging Markets | 2.6 | 3.5 |
| International Developed (1) | 19.2 | 15.1 |
| Regional Equity (2) | 3.1 | 2.0 |
| Total Int’l Funds | 24.9 | 20.6 |
| Global Equity | 7.9 | 2.9 |
| Total U.S. Equity (3) | 75.6 | 129.2 |
Source: Investment Company Institute
(1) Excludes global funds that include both U.S. and non-U.S. equities.
(2) Includes both developed and emerging market regions.
(3) Excludes global and international equity funds.
For more information
on Citibank DR programs, as well as industry trends and developments,
please visit citigroup.com/adr.
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