Foreign stock on the NYSE? How?

Discussion in 'Stocks' started by short&naked, Oct 5, 2008.

  1. I have been wondering how a company such as Sadia (SDA), a Brazilian meat producer which is listed on the Brazilian stock exchange can also be listed on the NYSE and quoted in USD. The stock is actually quoted in BRL.

    How does this work? When does the currency conversion occur?
  2. ADR share prices carry foreign currency risk depending on the movement of the US dollar against the Brazilian Real. Most ADRs trade in line with the underlying security. The spread is in general very small, reflecting the cost of foreign exchange conversion and other execution costs. If the currency of the underlying stock rises against the US dollar, the ADR price is expected to rise (and vice versa).