CDI Ratio Changes: What Investors Should Check Before Comparing Prices
A practical checklist for handling CDI ratio changes, share splits, and depositary adjustments when comparing ASX CDIs with ordinary shares.
Quick Answer
When a CDI ratio changes, every historical comparison needs a ratio check before you trust the spread. Update the receipt-to-share ratio, adjust for splits or consolidations, then convert currencies. Otherwise the chart can make a perfectly normal price look broken.
Why CDI ratios matter
A CDI is a local trading instrument that represents exposure to an underlying foreign share. The ratio can be one-to-one, fractional, or multiple CDIs per ordinary share.
That ratio is the bridge between the local quote and the home-market quote.
The checklist
Before comparing a CDI with an ordinary share, check:
- current CDI-to-share ratio
- whether the issuer announced a split, consolidation, or ratio update
- the effective date of the change
- the currency pair used for the comparison
- whether both markets were open during the comparison window
- whether historical data has been back-adjusted by your data provider
Common failure mode
The common mistake is using today's ratio against yesterday's unadjusted price. That can create a fake premium or discount overnight.
Another mistake is trusting a charting site that adjusts one line but not the other. Cross-listing analysis needs the same adjustment logic on both sides.
How to use the spread after a ratio change
Treat the first few sessions as a reset period. Look for the new normal range after both markets have traded and liquidity has settled. The spread history before the change may still be useful, but only if it has been adjusted to the same economic unit.
How StockResearch helps
StockResearch is designed around economic equivalence: ratio, currency, and time. When a ratio changes, that metadata matters as much as the price feed.
Open the comparison toolFAQ
Do CDI ratio changes change the company value?
No. They change the units being traded, similar to how a split changes the number of shares without changing enterprise value by itself.
Can ratio changes create false premiums?
Yes. A stale ratio can make one line look rich or cheap when the economic exposure is unchanged.
Should historical spreads be recalculated?
Yes, if you want a clean trend. Use a consistent ratio basis across the series.
This post is for informational purposes only and does not constitute financial advice.