JSE-listed EOH Holdings is hoping to attract American investors. The IT services company has launched an American depository receipt (ADR) programme in the US.
“The launch of our ADR programme will enable international investors interested in companies in emerging markets to more easily invest in EOH,” said CEO Asher Bohbot.
“We will use the programme to introduce EOH to international investors interested in investing in companies in emerging markets, particularly in South Africa,” he said.
EOH, which has a solid growth track record — both in terms of earnings and share price performance — operates mainly in South Africa, but also has operations in 22 other African countries.
It was recently ranked by the Financial Mail as the fourth best performing company on the JSE and has been among the top five best performing companies on the JSE for the last four years. The share price has added 70% in the past 12 months, giving it a market capitalisation north of R10bn.
“We are consolidating and expanding our African footprint and our service offerings to existing clients in the region. We will continue to grow aggressively, both organically and through acquisitions,” said Bohbot in a statement announcing the ADR programme.
Each EOH depository receipt represents one ordinary share and trades on the over-the-counter trading market in the US under the symbol “EOHYY”.
Shoprite, Growthpoint, Redefine, Blue Label Telecoms, Cashbuild, Sibanye Gold, Mix Telematics and Clover all launched ADR programmes in 2013 and there are several in the pipeline for 2014, EOH said.
“Investor demand for South African stocks is high,” said Lauren de Klerk, vice-president for ADR programmes at BNY Mellon, the bank sponsoring the launch for EOH.
“American investors prefer to invest in ADRs, rather than foreign ordinary shares, as the custody costs and brokerage costs are cheaper, investors are often precluded from investing offshore and ADRs are easily accessible through their brokers,” De Klerk said.
“ADRs are ‘wrapped’ to be seen as local investments, which institutional and retail investors can include in their local portfolios.”
Thirty-eight of the top 40 companies listed on the JSE have a depository receipts programme. The US market has more than US$1 trillion invested in such receipts. — (c) 2014 NewsCentral Media
