African ADRs

Last week, we took a look at an Africa-focused exchange traded fund. Funds of this sort provide US investors with a convenient entry to African markets. No muss, no fuss.

Unfortunately, most of the stocks that comprise these funds don’t trade on the NYSE or Nasdaq. They trade on their local exchanges or in Europe.

But American stock-pickers aren’t totally bereft of African options. Several African companies trade stateside via American Depositary Receipts (ADRs). ADRs are certificates that represent ownership of shares in a foreign-listed firm. They trade just like ordinary stocks do, and the companies that offer them must pay dividends in US-Dollars and report their financial statements in accordance with US GAAP.

Here are the African ADRs that trade on the NYSE and Nasdaq:

Anglogold Ashanti (AU) – a huge South Africa –based gold-miner that operates on four continents. Most of its proven mines are in Africa, and concentrated in South Africa.

DRDGold (DROOY) – South Africa’s fourth largest gold-mining firm. Its operations are situated near Johannesburg.

Gold Fields (GFI) – A Johannesburg-based miner that operates nine projects in South Africa, Ghana, Australia, and Peru.

Harmony Gold (HMY) 4.85B – Yet another South African gold miner. It has 11 projects in South Africa and is prospecting for more in Papua New Guinea.

Randgold (GOLD) – A Channel Islands-based gold-miner that operates primarily in Mali and Senegal.

Sappi (SPP) – A South Africa – based wood pulp and paper company. It operates paper mills in South Africa, throughout Europe, and the USA. It sells paper and packaging worldwide.

Sasol (SSL) – a natural gas and chemical company. Headquartered in Johannesburg, it boasts a diverse array of projects across Africa.

As you can see, the list is dominated by South African mining companies. So, it’s not particularly representative of the reasons I find Africa such a compelling investment opportunity. Still there are some interesting stories here that we will explore in future posts.

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