There are thousands of foreign stocks that are traded daily in the various exchanges like Amex, Nasdaq ,NYSE and the OTC.NYSE alone has 421 foreign stocks listed.The OTC market has many hundreds of foreign stocks since the listing requirements are far more easy than NYSE.However in recent months, many top companies of the world have moved their listing from NYSE to OTC due to Sarbane-Oxley and other strict reporting requirements.Some foreign firms with a low trading volume see that the NYSE listing fees of $50K per year is too high.Hence many world class firms like Nestle,EON AG, BNP Paribas can be bought and sold in the OTC market.
Some countries like UK,Japan,Brazil,Germany, etc. have many stocks listed in the US.
For countries with many ADR listings, finding one stock that is highly liquid can be a
challenging task.This is where the following table list can be helpful.
The table below lists the most traded ADR stock country-wise. For example, Brazil has many stocks such as PBR,RIO,ITU,BBD,ARA,etc. traded on a daily basis.But out of all the Brazilian ADRs the most traded stock by volume on a daily basis is RIO, the mining giant. This is listed in the table for Brazil.Similarly the most traded stock among British ADRs is BP, one of the top four oil companies of the world.
For an investor looking to invest some funds in a foreign country stock this table might be a good place to start.Since this table lists the highly liquid stocks, investing in them reduces the risk of liquidity problem especially in times of turbulent markets.Another advantage of picking one of these stocks is “you are going with the flow of many investors” since there is heavy interest in these stocks.While this can be negatively implied as a herd mentality, still it makes sense to put some money in a highly traded stock first before jumping into other stocks of a country.For example – it is a good idea to pick up some National bank of Greece – NBG first before going for Diana Shipping – DSX or other Greek ADRs.
The table also shows the stock performance YTD till May 23rd,2008 and the daily volume.The most traded ADR stock is RIO of Brazil while the least traded is CHRT of Singapore.
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*Nokia, StatoilHydro and ASML are in this year’s Business Week’s “Euro BW 50†list.
