Investments in depositary receipts set to increase

Depositary receipts are a type of security that represents ownership of shares in a foreign company. They are typically traded on a foreign stock exchange and are issued by a financial institution in the investor’s home country.

• Depositary receipts (DRs) are becoming increasingly popular among Thai investors as they provide an opportunity to invest in well-known foreign stocks and diversify portfolios.
• DRs allow investors to directly invest in foreign stocks through the Thai stock market, eliminating the need for currency exchange and overseas transactions.
• State-owned Krungthai Bank is an authorized DR issuer and plans to offer a wider range of DRs from global stock markets, providing investors with more options for portfolio diversification.

DRs have grown steadily on the Stock Exchange of Thailand, with around 16 billion baht worth held by investors. This trend is expected to continue as more investors show interest in new DRs. DRs allow investors to invest in foreign stocks directly through the Thai stock market, eliminating the need for currency exchange.

According to the SET, the latest DRs listed on the Thai bourse as of January 5 are HKTECH13, which focuses on investing in 30 big-cap technology stocks on the Hong Kong Stock Exchange, and JAPAN13 DR, investing in Japanese stocks based on the MSCI Japan and 100% hedged to the US dollar. Both are issued by KGI Securities (Thailand).

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State-owned Krungthai Bank has issued DRs for companies like Microsoft, Apple, Alphabet, Alibaba, and BYD. DRs provide an opportunity for investors to diversify their portfolios and potentially earn higher returns by investing in foreign stocks. Krungthai Bank plans to offer more DRs from various stock markets globally.

Krungthai Bank (KTB) plans to issue 26 new depositary receipts (DRs) this year, covering popular global stocks and the “Magnificent Seven” US stocks. DRs have gained popularity on the Stock Exchange of Thailand in recent years. KTB is the largest issuer of DRs, with 13 of the 25 available. The bank intends to launch six DRs in the first quarter, including for US stocks like Netflix, Starbucks, and Amazon. KTB has also applied to offer DRs for Amazon and Meta Platforms.