New Research Highlights Value of Stock Exchange-Listed or OTC-Traded Programs

NEW YORK, October 9, 2008 — American and global depositary receipt (DR) programs established by companies from emerging markets boost their domestic share prices and improve their home-market liquidity, according to a study conducted by independent research firm Oxford Metrica and sponsored by The Bank of New York Mellon.

The research found that shareholder value rose on average by up to 20 per cent over one year and share liquidity improved by 40 per cent over one year as a result of listing a DR program on a U.S. or European stock exchange.

Emerging market issuers that terminated their DR programs to the over-the- counter (OTC) trading market experienced the opposite effect, with local market share prices dropping on average by 20 per cent over a year.

The research covered 628 DR programs from 33 countries in Asia, Eastern Europe, Middle East, Africa, and Latin America between 1980 and 2007.

The research revealed that companies in Brazil, Russia, India and China (the "BRIC" markets) gained the greatest benefit from launching a DR program. (See full regional analysis below).

  Regional results -- stock exchange-listed DRs
  * 15 per cent value added in Asia
  * 8 per cent value added in EEMEA
  * 35 per cent value added in Latin America
  * 35 per cent value added in BRIC countries

  Regional results --  OTC- traded DRs
  * 25 per cent value added in Asia
  * 30 per cent value added in EEMEA
  * 40 per cent value added in Latin America
  * 50 per cent value added in BRIC countries

For emerging market companies that upgraded their DR programs from OTC- traded (Level I) to U.S. or European exchange-listed (Levels II/III) there were also significant benefits. On average they enjoyed 60 per cent uplift in domestic share price value that may be attributed to complying with stricter U.S. or international reporting requirements and U.S. GAAP or IFRS accounting.

DR programs also boosted the companies' home-market liquidity as a result of increased access to and visibility of the stock and the accompanying coverage by investment analysts. Listed companies experienced 40 per cent uplift, while OTC-traded DRs enjoyed a 48 per cent rise in liquidity.

Over the last four years, DR performance for emerging market companies has outperformed the S&P 500 Composite Index. An investment of $100 million in the S&P 500 between July 1, 2003 and June 30, 2007 would be worth $155 million, while that same investment in The Bank of New York Emerging Markets ADR Index would be worth $341 million.

Christopher Sturdy, executive vice president and head of The Bank of New York Mellon's Depositary Receipt Division, said: "The research confirms that establishing a DR program has significant benefits for the shareholders of emerging market companies. Emerging market issuers gain increased access to the global capital markets and the data shows that their market capitalization grows accordingly. The Bank of New York Mellon is committed to helping emerging market issuers, investors and brokers unlock the potential of these DR programs."

Dr. Rory Knight, principal of Oxford Metrica, said: "The results of our analysis -- which includes all emerging market DR programs established since 1980 -- are striking. DR programs demonstrably add value across markets, regions and type of instrument, whether stock exchange listed or OTC-traded."

Depositary Receipts, which include American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) are negotiable, U.S. dollar-denominated securities that represent a non-U.S. company's securities. DRs can be made eligible to trade on all U.S. stock exchanges as well as an increasing number of stock exchanges in Europe, Asia, the Middle East and Canada.

  To read a copy of the research report visit http://www.adrbny.com/.

  The Bank of New York Mellon

The Bank of New York Mellon's Depositary Receipt business is conducted through The Bank of New York subsidiary, which acts as depositary for more than 1,270 American and global depositary receipt programs, acting in partnership with leading companies from 60 countries. With an unrivalled commitment to helping securities issuers succeed in the world's rapidly evolving financial markets, the Company delivers the industry's most comprehensive suite of integrated depositary receipt, corporate trust, and stock transfer services. Additional information is available at http://www.adrbny.com/.

The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 37 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has more than $20 trillion in assets under custody and administration, more than $1 trillion in assets under management and services $11 trillion in outstanding debt. Additional information is available at http://www.bnymellon.com/.

Oxford Metrica

Oxford Metrica is an independent research and analytics firm in international investments. The firm focuses on risk, value, reputation and governance -- the strategic aspects of financial performance. Oxford Metrica aims to provide evidence-based support for key management decisions. Oxford Metrica also provides research and analytics to several hedge fund managers particularly those involving emerging markets and multi-manager strategies. Additional information on the firm is available at http://www.oxfordmetrica.com/.