Asian ADRs to flourish via US tax cut

Bush''s new Tax Act could benefit Asian companies with ADR programmes.

According to Citigroup, new tax laws in the US are set to boost American investor interest in Asian ADRs.

The reason is that ADRs will be given equal tax treatment to domestic stocks in respect to dividend payments on which the tax rate has been lowered to a maximum of 15%. Given Asian stocks tend to pay higher dividends than US stocks this could lead to a surge in interest in dividend-paying Asian ADRs.

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