Introduction to DR11

What is a DR?

A DR, or Depositary Receipt, is a security listed on the Stock Exchange of Thailand (SET). Investors can trade it like a regular stock, with no expiration date, and it is traded in Thai Baht. The price of a DR moves in line with the underlying foreign stock or foreign ETF.

List	Details
Reference Asset	Common stocks or ETFs traded on specified foreign stock exchanges as approved by the SEC.
Abbreviation	The maximum length is 10 characters. The first 8 characters represent the foreign securities, and the following 2 characters indicate the issuer number.
Trading Hours	According to the trading hours of the Stock Exchange of Thailand (no midday break).
Minimum Trading Quantity: 1	You can enter up to a maximum of 10 characters. The first 8 alphanumeric characters represent the foreign securities, and the following 2 characters indicate the issuer number.
Trading Currency	Baht
Trading Methods and Price Fluctuation Range	Similar to Stocks
Fee	Similar to Stocks

Return on DR Investment

Capital Gain

Capital Gain refers to the profit an investor earns if they sell a DR at a price higher than the purchase price. However, if the price moves unfavorably, there is also a risk of loss.

Dividends or Benefits

Dividends or benefits arising from foreign securities:

When the parent stock or ETF declares a dividend, investors will receive dividends accordingly. However, there are certain conditions: the dividends received will be subject to deductions for operational fees as specified in the custodial agreement (if any).

Factors Affecting the Price of DR

1. The price of the underlying asset abroad (in the case of a fixed exchange rate)

Price of the Underlying Asset

DR Price

Price of the Underlying Asset

DR Price

2. Exchange Rate

Since DRs are traded in Thai Baht, but their trading prices are based on the underlying assets listed overseas and denominated in their respective foreign currencies, fluctuations in exchange rates will affect the DR price locally. This means that even if the price of the underlying asset remains constant, changes in the exchange rate can cause the DR price in Thailand to be higher or lower at times.

Strengthening of the Thai Baht

DR Price Decrease

Price of the Underlying Asset

Increase in DR Price

Additionally, factors such as investor demand and the differing trading hours between the Thai stock market and foreign stock markets play a role. During periods when foreign markets are closed, the DR price traded on the Thai stock exchange lacks a reference price, which may affect the liquidity of DRs during that time.

How DRs Work

The issuer offers DRs to the public through an initial public offering (IPO) or sells them via the stock exchange trading system. All proceeds from the sale are used to purchase the underlying foreign securities, which are then registered to be traded in real-time on the stock exchange, just like ordinary stocks.