WBHO taps American investor pool

WBHO has become the third JSE-listed construction firm to tap the US investor pool‚ launching a sponsored American depositary receipt (ADR) programme this week.

The JSE's third-largest construction group‚ with a market capitalisation of R8.5-billion‚ on Monday launched its sponsored ADR programme on the over-the-counter market in the US through the Bank of New York Mellon.

Sector heavyweight Murray and Roberts – market cap R10.6-billion – has a sponsored ADR programme through Deutsche Bank‚ while Aveng has an unsponsored programme accessible through Deutsche Bank‚ Citibank‚ Bank of New York Mellon and JPMorgan.

Each depositary receipt in WBHO's ADR programme represents one of its ordinary shares. "By establishing the ADR programme‚ WBHO hopes to make investing in WBHO accessible to more international investors‚ particularly US investors‚" the firm said.

WBHO‚ Murray and Roberts, and Aveng have the highest levels of foreign ownership‚ with the US being the biggest foreign investor market for them. Aveng is 14.7% held by US investors‚ followed by Murray and Roberts at 10.1% and WBHO at 9.2%‚ according to Bloomberg data.

Ownership by investors in Australia‚ where these companies have a significant presence‚ is much lower.

The vice-president of the Bank of New York Mellon's depositary receipts business‚ Lauren de Klerk, said an ADR programme created investor awareness in the US and made the stock more accessible‚ particularly for investors who had mandate restrictions allowing them to invest in US securities only.

The programme overcame these restrictions as ADRs were US securities.

Bank of New York Mellon has 44 sponsored depositary receipt programmes for South African stocks and 37 unsponsored ones.

De Klerk said US investors preferred stocks which paid good dividends‚ had pan-African exposure‚ and were in cyclical industries where an upturn was expected. – BDpro