Also known as global registered shares, global shares are shares of stock that are traded in a number of different countries, typically denominated in the currency appropriate for each of those nations. The shares provide the same rights and responsibilities to all shareholders, regardless of how the stock is denominated. This is in contrast to other international stock options like American Depositary Receipts or Global Depositary Receipts, which are essentially localized shares of stock that are available on a global scale rather than a global stock option that is structured to utilize local currencies.
With many companies today operating on a worldwide scale, the use of global shares as a means of building an investor base is increasingly common. The process is often perceived as being helpful for investors, since there is no real need to consider foreign exchange rates when purchasing or selling the shares, as they are denominated in local currencies. This means that an investor may purchase shares issued by an international company that is based in Japan, but pay for those shares using euros or US dollars rather than having to convert his or her local currency into the Japanese yen.
Depending on the regulations that govern a particular stock exchange, the availability of global shares can simplify the process of qualifying for trading on that exchange. With no real barriers in terms of currency conversion present in the process, inclusion in the marketplace is easier to maintain, which in turn increases the chances of attracting investors that buy any shares currently available on the market. As a result, the company has increased potential to attract attention when business growth justifies the release of additional shares for purchase by investors, since the pool of potential investors is worldwide and immediate, rather than limited to domestic investors only.
With global shares, everyone involved has the opportunity to benefit from the international shares of stock that are denominated in local currency. Issuers have the chance to sell shares in areas that may be closed otherwise, while investors enjoy the ability to purchase international holdings that would be more difficult to obtain if those shares were not available in more than one denomination. As with any stock option, investors considering the purchase of global shares should investigate the past performance of the option, the financial stability of the issuer, and the prospects for the shares to earn returns in the future.
