CDI vs Ordinary Shares: Investor Checklist Before You Buy
A practical checklist for comparing CDIs and ordinary shares, including ratios, currency, liquidity, dividends, custody, and trading costs.
CDI vs ordinary shares decisions come down to economic equivalence, access, and friction. A CHESS Depositary Interest can represent a foreign ordinary share on the ASX, but investors still need to check the ratio, currency conversion, liquidity, tax treatment, and broker costs before deciding which line to buy.
Quick Answer
1. Start with the CDI-to-share ratio. 2. Convert both listings into the same currency. 3. Compare bid-ask spreads during overlapping market hours. 4. Check dividend withholding and tax paperwork. 5. Include brokerage, FX, and custody fees before calling one line cheaper.
The ratio comes first
A CDI is not always one ordinary share. Some programs use a fixed ratio, and that ratio changes the fair-price comparison. If one CDI represents one-fifth of an ordinary share, the CDI quote needs to be multiplied by five before currency conversion.
Skipping this step is the easiest way to misread a spread.
Currency makes the comparison honest
Once the ratio is normalized, convert both listings into one currency. Use the same FX timestamp for both sides and avoid mixing delayed quotes with live FX.
The spread that matters is not the screen price. It is the normalized price after ratio and currency.
Liquidity can beat a small discount
A line that looks 0.5% cheaper can still be worse if the spread is wide or the order book is thin. Retail investors should compare depth, average volume, and whether the two markets are open at the same time.
Execution friction matters because cross-listing spreads can move before a small order fills.
Fees change the answer
Brokerage, FX markup, custody fees, and dividend handling can all move the decision. A cheaper quote can become more expensive after the trade ticket settles.
Use StockResearch to normalize the math first, then decide whether the execution path actually fits your account.
FAQ
Are CDIs economically the same as ordinary shares?
Often, but only after applying the correct ratio and program terms. Always read the depositary details.
Should I always buy the cheaper line?
No. Include liquidity, fees, taxes, market hours, and your broker's access before trading.
What is the first number to check?
The CDI ratio. Every other comparison depends on getting that right.
This post is for informational purposes only and does not constitute financial advice.