Blue Label Telecoms launches American Depositary Receipt programme with Bank of New York Mellon

Blue Label Telecoms has appointed BNY Mellon, the global leader in investment management and investment services, as the depositary bank for its sponsored depositary receipt (DR) programme. Each Blue Label Telecoms DR represents 10 ordinary shares and trades on the OTC market in the US, under the symbol "BULBY". Blue Label's ordinary shares trade on the Johannesburg Stock Exchange (JSE) under the symbol "BLU".

Blue Label's core business is the virtual distribution of secure electronic tokens of value and transactional services across its global footprint of touch points. The group's strategy is delivered by extending its global footprint of touch points, both organically and acquisitively, to fulfil the significant demand for delivery of multiple prepaid products and services presented through a single interface, across various delivery mechanisms, and via numerous merchants or vendors. Core products are prepaid airtime, data and electricity, financial services, ticketing and vouchers.

"This initiative accelerates our efforts in diversifying and increasing our international shareholder base, and enhances awareness of Blue Label's principle operations in South Africa, the United Kingdom, Mexico and India. The launch, just five years after our listing on the JSE, is an affirmation of our capability and sustainability, while commanding additional stature for Blue Label in the investment community," says Mark Levy, joint CEO of Blue Label.

"We look forward to helping Blue Label unlock the potential of the US investment community," says Lauren Czepek, vice-president of BNY Mellon in South Africa. "As the world's leading depositary, BNY Mellon will utilise its many resources to develop a mutually beneficial partnership with the company and its investors."

BNY Mellon has launched over 60 American Depository Receipt Programmes, making South African companies easily tradeable for US investors. "Sun International, Mr Price, Standard Bank, Pinnacle Technology Holdings and Ellies all launched programmes in 2012, and there are more in the pipeline," explains Czepek.

"Investor demand for African stocks is high. American investors buy ADRs rather than foreign ordinary shares, as ADRs are 'wrapped' to be seen as local investments, which institutional and retail investors prefer. Some institutional investors have mandate restrictions that preclude them from investing offshore. The ADR is a vehicle for them to put foreign stocks in local portfolios. It is often cheaper to invest in the ADR due to hefty custody costs and local brokerage costs for investing in the ordinary share. ADRs are also easily accessible in the US via their stockbrokers." An amount of $4.1 trillion of the total $16 trillion US investment is invested in non-US equities, of which $1.1 trillion is invested in DRs.

BNY Mellon has an 88% share of the South African market, including 100% of the telecommunications sector. Thirty-five of the 42 JSE top 40 constituents have an ADR programme, and BNY Mellon is the depositary bank for 29 of these.

BNY Mellon has also retained Goldfields, Sappi and Anglogold. These are all US listed programmes and subject to US listing requirement costs and regulation. BNY Mellon acts as depositary bank for five of the six US listed ADR programmes. All other programmes are unlisted and trade over the counter, and are not subject to the substantial costs and regulation of the listed programmes. They are at no cost to the issuer and there are also no regulatory requirements.

BNY Mellon acts as depositary for more than 2 500 American and global depositary receipt programmes, acting in partnership with leading companies from 65 countries. BNY Mellon is committed to helping securities issuers access the world's rapidly evolving financial markets and delivers a comprehensive suite of depositary receipt services. Learn more at www.bnymellon.com/dr.

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $26.6 trillion in assets under custody and administration and $1.3 trillion in assets under management, and services $11.9 trillion in outstanding debt and processes global payments averaging $1.4 trillion per day.

BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Learn more at www.bnymellon.com or follow us on Twitter@BNYMellon.

What is an ADR?

American Depositary Receipts are US securities that represent shares of a non-US company in the US markets. US investors buy ADRs through their brokers just like any other stock. Brokers have a choice of buying ADRs and or buying ordinary shares and converting these to ADRs with no delay. Unsponsored ADRs trade in the over-the-counter market. Sponsored ADRs trade via the stock exchange market. Issuers use ADRs to increase stock value and liquidity. They help to enhance the issuers' visibility in the US and attract North American investors, reduce shareholder concentration, increase holdings by high-net-worth individuals and retail ownership and increase liquidity of the stock.

Issuers do not pay to develop a programme. BNY Mellon pays all costs associated with the establishment of the programme, and there are no ongoing costs. Level1 OTC ADRS have no regulatory requirements. The more involved the issuer in the DR programme, the more successful the ADR tends to be.