i am wondering why the ADR trades at a substancial discount to asx traded price
(for those who dont know an ADR (american depositary reciept) is a common way for international shares to trade in the US )
RIO here trades for currently $84.10 while its ADR trades at $73.14 ( however i would expect a small margin for foreign exchange)
Looking at SP history comparsion they have traded fairly closely for twenty years and this divergence seems to have occured during the GFC and since then the SP have moved together but with the 10% margin
Even stranger is that BHP ADR trades at a slight premium to its SP here (allowing for 2 shrs = 1 adr)
With trading companies frequently making money from spread trading and arbitrage i cant understand the 13% discount
So if a person was bullish on RIO would it not make more sence to buy the ADR. or do a spread trade selling local RIO and buying its ADR.
Can someone please tell me what i am missing?
rio adr discount to aussie sp
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Last
$119.70 |
Change
2.220(1.89%) |
Mkt cap ! $44.43B | |||
| Open | High | Low | Value | Volume |
| $119.20 | $120.17 | $118.54 | $222.8M | 1.862M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 2 | 192 | $119.60 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $119.70 | 1276 | 2 |
View Market Depth
| Last trade - 16.10pm 01/08/2024 (20 minute delay) ? |
| RIO (ASX) Chart |