International Public Companies Get Home Market and US Boost From Cross-Trading on OTCQX
International companies, with a primary listing outside the US, experienced a 28% increase in trading volume by number of shares within their home market after joining the OTCQX® Best Market, according to a new study released by OTC Markets Group Inc. In addition, companies saw a 7-fold increase in US ownership.
The independent study, “The OTCQX Advantage: Benefits for International Companies,” was conducted by strategic advisory firm Oxford Metrica to evaluate the value and liquidity impact within an international company’s home market upon cross-trading on OTCQX, the premium market of the US over-the-counter (“OTC”) equity market. The study evaluated a data set of over 500 international issuers that have traded on the OTCQX Market since 2007.
“We are pleased to deliver a premium market for cross-trading that provides executive management and investor relations teams with tangible, measurable results that correlate to enhanced visibility, growth in US ownership and an increase in shareholder value, while improving the respective home market liquidity,” said Jason Paltrowitz, Executive Vice President of Corporate Services at OTC Markets Group. “This latest study is indicative of the demonstrated quality of OTCQX Market and the opportunity presented for established, investor-focused international companies to experience incremental benefits of an efficient, cost-effective path to trade among leading global issuers in the US capital markets.”
Study Findings include:
– US ownership increased by 7-fold after joining the OTCQX Market
– Liquidity, as measured by trading volume by number of shares, increased by 28% within the home market following a move to the OTCQX Market
– Trading volume by number of shares increased 37% within the OTC market
– Trading volume of companies falling into the lower half of the distribution by size increased 43%
– Trading volume of companies falling into the upper half of the distribution by size increased 12%
The study was commissioned by OTC Markets Group and conducted by Oxford Metrica. All international companies that have been admitted to the OTCQX since 2007 were analyzed. The resultant portfolio consists of more than 500 firms. Price and volume data one year prior to joining OTCQX and three years after joining were obtained, as well as ownership data one year prior and 5-years post-join.
A copy of the full study is available HERE.