ADRs allow US investors to buy shares of foreign companies through American stock exchanges, without dealing with foreign markets directly.
Asian Companies with ADRs
| Company | ADR Ticker | Exchange |
| Alibaba | BABA | NYSE |
| Toyota | TM | NYSE |
| Sony | SONY | NYSE |
| Infosys | INFY | NYSE |
| HDFC Bank | HDB | NYSE |
| TSMC | TSM | NYSE |
How ADRs Work
- A bank (like JPMorgan, Citibank) buys shares on the Asian exchange
- Holds them in custody
- Issues ADR certificates trading on US exchanges
- 1 ADR may represent 1, 10, or any number of underlying shares
ADR Premium/Discount
ADRs sometimes trade at different prices than the underlying shares due to time zone differences, currency effects, and supply/demand. This creates arbitrage opportunities.