SMIC launches ADR program

MANILA, Philippines - SM Investment Corp. (SMIC) has launched its American Depositary Receipt (ADR) program to broaden its investor base, a top company executive said.

This will allow SMIC to tap US -based investors and boost its global presence, said Jose T. Sio, executive vice president and chief finance officer of SMIC.

“This initiative affirms SMIC’s desire to reach out and better service the needs of more investors at a time when interest in the Philippines among US investors is fast building up,” he said.

ADRs are negotiable securities issued by a US depositary bank to domestic buyers as a substitute for direct ownership of publicly-traded stocks of a foreign company. These can be traded on US trading venues like the New York Stock Exchange, Nasdaq and over-the-counter (OTC) markets.

Specifically, SMIC said the ADR program will allow investors to trade SMIC common shares in their own time zone and to settle their transactions locally.

Hence, it offers convenience and reduces currency risk on the part of the investors, which buy ADRs in dollars.

“ADR securities issued in the US representing SMIC common shares can be traded OTC under the ticker symbol SMIVY,” the Sy-led conglomerate said in a disclosure.

One SMIC ADR represents 0.5 common share of SMIC, which appointed The Bank of New York (BNY) Mellon as its depositary. BNY Mellon is the world’s largest depositary for ADRs and Global Depositary Receipts.

The ADR program also “opens for SMIC the door that leads to a large pool of US ADR investors,” the company said, adding that broadening the investor base will also improve corporate visibility and global presence.

“SMIC is widely regarded by international investors as a strong proxy for the Philippine growth story and we believe that it will continue to be an attractive investment proposition,” Sio said.

Other Philippine firms that already took advantage of ADRs include telecommunications giant Philippine Long Distance Telephone Co., infrastructure conglomerate Metro Pacific Investments Corp., holding firm Aboitiz Equity Ventures Inc. and the country’s oldest conglomerate, Ayala Corp.

SMIC is one of the country’s largest holding companies with a market capitalization of around $17 billion.

In the first quarter, its net income climbed 22 percent to P7.4 billion while revenues jumped 15 percent to P56.8 billion, driven by the surge in income of the banking business and strong profit growth of the mall and property businesses.