Gaining active presence in the global capital market has been one of Argentina´s main challenges in the last years. Many different market participants have contributed to achieve this goal, which entails huge benefits to our domestic economy. Following this trend, the following product is offered to enable investment in foreign companies from Argentina or vice versa.
CEDEARs (Argentine Depositary Receipts) Depositary Receipts as an opportunity to invest in foreign companies. Depositary Receipts (DRs) are negotiable certificates issued in Argentina representing shares in foreign companies. Trading Argentine DRs is similar to investing in the foreign company, and each CEDEAR issued is backed by the deposit of the pertinent shares of stock it represents.
Among other benefits of DRs, we can find:
– Investing in CEDEARs lets investors incorporate to their Argentine equity portfolio a wide range of companies listed on foreign Exchanges around the world.
– DRs are traded in BYMA, your regular Broker-Dealer (ALYC) will act as an intermediary to the trade, and the transaction will be settled with local market liquidity (ARS or USD).
– CEDEARs, as well as other securities, are kept under custody at Caja de Valores S.A., the Argentine Central Securities Depository, which provides for investor account services and a “Single Point of Contact (SPOC)” that is a free of charge Internet-based online platform where investors can check account balances and movements for past periods. Therefore, investors do not need to open accounts in foreign countries.
– As far as Taxes are concerned, investing in CEDEARs or investing in a listed company will bear the same tax burden for individuals, since trading of Argentine stocks and CEDEARs in BYMA is exempt from Income Tax.
In order to boost this investment alternative, BYMA has recently introduced the Market Makers program to provide for liquidity to the trading of more than 120 investment instruments, so as to permanently show available quotes on screen. As a consequence, CEDEARs current trading volume represents 18% of the stock exchange total daily trading volume. As from January to July 26 inclusive, CEDEARs daily trading grew from ARS 40 million to ARS 290 million.
Through the implementation of concrete and sustainable plans, BYMA fosters the Argentine capital market growth.
