Dear all,
I have a hard time conceptualizing Depository Receipt (" DR"). Can someone explain it in me using simpler terms? Below is my thoughts:
Let say a firm, ABC, in Singapore want to raise capital overseas and have chosen Hong Kong as one of the possible destination.
In this case am I right to say: ABC will deposit it’s shares with a bank in Singapore. The bank will then issue DR denominated in Hong Kong Dollars (" HKD") which will trade in Hong Kong’s exchange?
Or the concept of DR is the other way round?
Can someone explain to me? I think the problems I face is due to the different pespectives i.e. issuer’s or investor’s point of view.
Thank you.
Cheers,
Ernest