Discount to Parent Share Price13 Jul 2021 19:25
Can anyone explain why these GDR's trade at a significant discount to the parent share price? They seem to trade at around 60% of the share price.
Each GDR is equivalent to one share so surely they should be very close in price to the share price. I can understand a small discount to represent the additional risk of being separated from the security itself and to cater for possible currency movements but 40% seems a lot.
I tried to see if this was a standard matter for other GDR's and I am struggling a bit. An Indian listed pharma company, Cipla, has a GDR trading on the Luxembourg market and that trades at almost no discount.
Any information would be gratefully received.