Reminder: Westpac ADR Conversion Deadline Nearing Soon

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Australia’s Westpac Banking Corporation’s ADR was delisted from the NYSE and last traded there on Jan 31, 2022. ADR holders have the option of converting them to ordinary shares trading on the US OTC market or on the domestic market in Australia. The deadline to surrender ADRs is June 2, 2022 – less than 2 weeks away.

If ADRs are not converted before June 2nd, then the depository will automatically sell the underlying shares after that date and you must surrender the shares to receive the sale proceeds less fees and any taxes.

Westpac ADRs can be converted to WEBNF on the OTC market or WBC.AX trading on the ASX.

Below is an excerpt from the termination notice:

As a result, the existing ADR facility will be terminated effective Monday, January 31, 2022 Under the terms of the Deposit Agreement, you have until at least June 2, 2022 to surrender your Westpac ADRs for  delivery of the underlying shares. If you surrender ADRs for delivery o f the underlying shares, you must pay a cable fee of $17.50, a cancellation fee of up to $0.05 per ADRs surrendered and any applicable U.S. or local taxes or governmental charges. Payment should be made payable to The Bank of New York Mellon.

Subsequent to June 2, 2022 under the terms of the Deposit Agreement, the Depositary may attempt to sell the underlying shares. If the Depositary has sold such shares, you must surrender your ADRs to obtain payment of the sale proceeds, net of the expenses of sale, any applicable U.S. or local taxes or government charges and a cancellation fee of up to $0.05 per ADRs.

To surrender your ADRs, the address of the Depositary is: The Bank of New York Mellon, 240 Greenwich Street, Depositary Receipts Division – 8th Floor, Attention: Cancellation Desk, New York, NY 10286. Registered or overnight mail is the suggested method of delivering DRs to the Depositary.

Source: BNY Mellon 

Related:

Disclosure: Long WEBNF

Russia’s Gazprom To Terminate ADR Program

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Russian energy giant Gazprom has decided to terminate its ADR program. According to the depository BNY Mellon the ADR program will be terminated June 16, 2022. Holders of the ADRs have the option to convert them to ordinary shares that trade on the domestic exchange in Russia or surrender the ADRs to receive payment of sale proceeds. Gazprom used to trade on the OTC markets under the ticker OGZPY.

Below is the termination notice from BNY Mellon:

Click to enlarge

Source: BNY Mellon

Gazprom Related Useful Links:

  1. Gazprom Neft to end ADR program on June 16 – depositary, Interfax
  2. How to convert Gazprom ADRs and other Russian DRs to local shares, The Long Run Plan
  3. GAZPROM & CO: WHAT TO DO WITH RUSSIAN ADRS?, Undervalued Shares
  4. Gazprom – Realtime Stock Quote on Moscow Exchange, Reuters

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Disclosure: No positions

Rail Transportation in Canada: Infographic

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I have written many times before that railroads are an important pillar of the Canadian economy. Just two freight railroads – Canadian National(CNI) and Canadian Pacific (CP) – dominate the industry. The following infographic from Statistics Canada shows some of the interesting facts about rail transportation in 2020:

Click to enlarge

Source: Statistics Canada

Disclosure: Long CNI

Which Political Party is Best for Australian Stocks?

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The federal election in Australia is on Saturday, May 21, 2022.Equity market investors will be closely monitoring the outcome the election. With that said, which politic party is best for stock prices?

A recent article by Ashley Owen shows that since the creation of the Federation, right-leaning governments have been better for Australian stock prices than left-leaning ones as shown in the chart below:

Click to enlarge

Source: Which political party is best for share prices? by Ashley Owen, Stanford Brown and The Lunar Group

From the above article:

The chart shows total returns from Australian shares since Federation, divided into ‘right’ periods (blue line) and ‘left’ periods (red line). The average annual total returns (including dividends reinvested) for each period are shown in the lower section.

Returns

Right-leaning governments win but due mainly to luck. Total returns from the local stock market have averaged 10.5% per year since Federation, with 12% p.a. on average under right-leaning governments beating 8% p.a. average returns under left-leaning governments.

The full article is worth a read.

Related ETF:

  • iShares MSCI Australia ETF (EWA)

Disclosure: No positions

Russia’s Lukoil To Terminate ADR Program

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Russian energy giant Lukoil(LUKOY) has announced plans to terminate its ADR program. In addition, the firm will also cancel its listing on the London Stock Exchange as well effective June 6, 2022. This is a big blow for American and foreign investors in Lukoil. However this is not a surprise since Russian passed a law in April, 2022 which banned the trading of domestic companies shares on foreign markets.

Below is the press release from the company site:

ON DEPOSITARY RECEIPT FACILITIES OF PJSC LUKOIL
Thursday, May 5, 2022

PJSC «LUKOIL» (hereinafter, the “Company”) announces that the recently enacted Russian Federation law (Federal Law No. 114-FZ of April 16, 2022 (the “Law”)), prohibits circulation outside of Russia of depositary receipts representing shares of Russian issuers, effective April 27, 2022. The Law requires Russian issuers to initiate termination of their depositary receipt facilities.

In accordance with the Law and the terms and conditions of the Company’s American Depositary Receipt (hereinafter, “ADR”) facilities, the Company advised Citibank N.A. of its intent to terminate its Level 1 ADR facility and Rule 144A ADR facility, effective December 30, 2022.

The Company also notified the FCA and the London Stock Exchange of its intent to cancel the listing and admission to trading of the ADRs (ISIN US69343P1057 and ISIN US69343P2048) and ordinary shares of PJSC LUKOIL (ISIN RU0009024277), effective June 6, 2022.

ADR holders may convert their ADRs into ordinary shares of PJSC «LUKOIL» by December 30, 2022. Only persons who held ADRs as of April 27, 2022, are eligible for conversion of their ADRs into ordinary shares of PJSC «LUKOIL».

Source: Lukoil

Here is an article from Interfax:

MOSCOW. May 5 (Interfax) – Lukoil has sent notices to request terminating the listing of its ADR programs and the listing of the company’s shares on the London Stock Exchange, the Russian oil company said in a statement.

Lukoil said that, in accordance with the recently enacted Russian law prohibiting circulation outside of Russia of depositary receipts representing shares of Russian issuers, it had advised Citibank N.A. of its intent to terminate its Level 1 ADR facility and Rule 144A ADR facility, effective December 30, 2022.

The company also notified the FCA and the London Stock Exchange of its intent to cancel the listing and admission to trading of the ADRs and ordinary shares of Lukoil, effective June 6, 2022.

ADR holders may convert their ADRs into ordinary shares of Lukoil by December 30, 2022. Only persons who held ADRs as of April 27, 2022, are eligible for conversion of their ADRs into ordinary shares of Lukoil.

ADR were traded for 30.6% of Lukoil’s shares as of the end of May 2021, when data were last disclosed. The depositary receipts are listed on the LSE and trade on the Frankfurt, Munich and Stuttgart stock exchanges as well as the U.S. OTC market.

Source: Interfax

Since February Russian stocks trading on the London Stock Exchange and US markets have been halted due to Russia’s invasion of Ukraine. Now with trading on foreign markets banned by Russia, Lukoil is one of the first firms to terminate its depository programs. Other Russian companies will follow soon.

For American investors holding Lukoil, now is the time to make a decision on what to do with their ADRs.

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Disclosure: No positions