Replies to post #365 on The Rising Influence of Rising Affluence

[DewDiligence]

Re: Price disparity between BHP and BBL

What could possibly explain this discrepancy?

The shares of BHP and BBL that trade on the NYSE are ADR’s which track their home-market shares in Sydney and London, respectively. So the real question is why there is a disparity between the prices of the home-market shares?

Differences in trading liquidity (of the home-market shares, not the ADR’s) could explain some disparity in the prices of BHP and BBL, but not a spread as large as 16%.

Could the dividends for BBL be any less secure?

No. Shareholders of the two parent companies have identical rights with respect to receiving a dividend—the only distinction is in the form of payment and the tax withholding, as mentioned in #msg-41930863.

I am looking for other ideas to explain this discrepancy.

The best explanation, IMO, is the quotation at the bottom of this message :- )