U.S. banks that offer depositary receipt services are looking for opportunities in the euro market.

The banks are attacking it somewhat differently-from trademarking a European Monetary Union depositary receipt product to announcing "EDR" services resembling those offered for global depositary receipts. But the bankers involved all have one thing in mind: that European retail investors will snap up these international stocks as eagerly as Americans have.

Last week Bank of New York announced it would offer depositary receipts denominated in euros. According to Joseph Velli, senior executive vice president, the euro depositary receipts will be offered on any exchange for which the issuer meets the criteria, including London.

This service will come up against Citibank's offering, euroDR, which is the result of a partnership with the Paris bourse.

Large corporations "will have difficulty not contemplating raising money in the euro market because of its depth and size," said James Donovan, global managing director of depositary receipt services at Citibank, which is targeting large-capitalization industry and geographic leaders for its issuers.

And J.P. Morgan said it would offer euro-denominated depositary receipts, just as it has done with national European currencies and dollar- denominated global depositary receipts.

Once a market for publicly listed euro-denominated depositary receipts picks up, observers said, companies may seek these listings not just to manage their capital, but to use the receipts to fund acquisitions.

Banks may also see issuers start to favor euro-denominated versions of global depositary receipts. Mr. Velli said he expects global depositary receipt issuance to shift to euro depositary receipt issuance "if the euro becomes a competing force."

But bankers are tempering their expectations with pragmatism.

"I'm not sure that European individual investors will buy stock as they have in the United States," said Patrick Colle, vice president at J.P. Morgan in London. "Individual investors are first likely to buy mutual funds, (whose managers) are used to buying in dollars."

Interest in issuing euro-denominated depositary receipts, either through public or private offerings, is most likely to come from the emerging markets, bankers said. Bank of New York is targeting companies from Latin America, Russia, and Asia for euro depositary receipts.

And Citibank, which is aiming to provide euroDRs to 10 companies by midyear, said it is hearing of investor interest in recently privatized Latin American telecommunication companies as well as U.S. companies with products sold in Europe. Ms. Mandaro is assistant editor of International Banker, a sister publication of American Banker.

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