SouthAfrica.info (Johannesburg)

South Africa: SA Firm in U.S. Investment Programme

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 investors.

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."

The 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."

Ads by Google

Copyright © 2013 SouthAfrica.info. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.