Globally Registered Shares

Globally registered shares, or global shares, are stocks listed in multiple markets worldwide. They maintain the same class of stock, regardless of the market where they are issued. They are denominated on the exchanges in the local currency, including any dividends to be paid. All shareholder records are kept in the foreign locale also. By issuing stocks in this manner, companies are able to provide shareholders around the globe with equal equity rights and are able to work around foreign ownership regulations.

As mentioned, global shares benefit investors facing restrictions in their holdings of foreign shares. By purchasing global shares of a foreign company listed on a local exchange, the investor is able to avoid any restrictions to foreign stock ownership since the foreign stock is issued locally. Issuing in local currency eliminates any currency conversion fees. Global shares were first issued by Daimler Chrysler in November 1998 in 21 markets and their ability to gain equity in foreign markets has encouraged other companies to issue their own global shares. Celanese AG issued global shares in 1999 and UBS followed suit in 2000. Still, the global share concept remains on the cutting edge of investment development and is likely to become more popular in the future as more companies seek to expand globally.

Global shares also provide opportunities for the firms they represent. By having large amounts of equity in a foreign market a firm can seek to acquire foreign firms through stock swaps. Elimination of currency conversion also provides issuers increased liquidity and higher trading volume. Also, when a company trades its stock around the globe, the trading day never stops but remains in fluid motion.

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