PSA 0.00% 2.1¢ petsec energy limited

adrs and impact on share price

  1. 1,317 Posts.
    One possible explanation for the strength in the Petsec share price during June, apart from growing recognition of the cash coming in and great fundamentals, is growing demand for PSA's American Depositary Receipts.
    Any demand for Petsec ADRs in the US has to be filled by a broker buying the underlying stock on the ASX at the rate of 5 shares to one ADR. And given the illiquid nature of the shares here that could translate into significant price rises. (And of course vice versa if ADFR holders wanted to sell).
    According to PSA's 20-F filing to the SEC, PSA had some 2.78 million ADRs on issue at the end of MAY, representing some 13.9 million shares or 13% of the company's issued capital.
    It is hard to tell what happened to the ADR volumes during June from the charts on but there does not appear to have been much increase in volume. The ADR price however went up from around US$1.60 to over US$2.60 at one point. They closed last friday at US$2.50 or a shade below our closing price.
    For PSA holders it is worth keeping a watch on those ADRs. Cheers JBC
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