SA firm in US investment programme
19 February 2013
South African telecommunications company Blue Label Telecoms has signed an
agreement for global investment services firm BNY Mellon to act as the depositary
bank in its American Depositary Receipts (ADR) programme to attract international
An American depositary receipt represents securities of non-American companies
which trade in US financial markets and is issued by a local American bank.
"This initiative accelerates our efforts in diversifying and increasing our international
shareholder base and enhance awareness of Blue Label's principal operations in South Africa, the United Kingdom, Mexico and India," joint Blue Label CEO Mark Levy said in a statement on Monday.
"The launch, just five years after our listing on the Johannesburg Stock Exchange
[JSE], is an affirmation of our capability and sustainability, while commanding
additional stature for Blue Label in the investment community."
company's main products are prepaid airtime, data and electricity, financial
services, ticketing and vouchers.
BNY Mellon is a leading global depositary bank and has launched over 60 ADR
programmes to make South African companies tradeable for United States investors. "We look forward to helping Blue Label unlock the potential of the US investment community," said vice president of BNY Mellon South Africa, Lauren Czepek.
Blue Label joins the ranks of companies like Standard Bank, Mr Price and Sun
International to launch ADR Programmes.
"Investor demand for African stocks is high," Czepek said. "American investors buy
ADRs rather than foreign ordinary shares as ADRs are 'wrapped' to be seen as local
investments which institutional and retail investors prefer."
BNY Mellon holds 88% of the South African market, and is the depositary bank for 29 of the JSE's 35 top constituents who have ADR programmes in place.
"The ADR is a vehicle for
[institutional investors] to put foreign stocks in local
portfolios," she said.
"ADRs are also easily accessible in the US via their stockbrokers."