CEDEAR

The Puerto Madero skyline in Buenos Aires at night — Photo: Skyline Puerto Madero.jpg — Luis Argerich, CC BY 2.0

Definition

Certificado de Depósito Argentino — a certificate traded on BYMA that represents shares of a foreign company or ETF, letting Argentine investors buy international assets in pesos without an account abroad.

Why it matters

One of the most widely used instruments in Argentina — but its peso price mixes the underlying asset's move with the implied exchange rate, which beginners often miss.

How it works in practice

A depositary holds the real foreign shares and issues certificates against them. Each CEDEAR has a ratio — how many certificates equal one underlying share — and the ratio is not the same for every company. You buy and sell them in pesos through an Argentine broker (ALyC) during local market hours, and dividends paid by the foreign company are passed through, net of any withholding at source. The peso price of a CEDEAR therefore reflects three things at once: the share price abroad, the ratio, and the implied exchange rate the market is using.

A concrete example

Take a CEDEAR with a ratio of 20 to 1 on a share worth USD 200 abroad. One certificate represents USD 10 of the underlying. If the implied exchange rate is 1,000 pesos per dollar, the certificate should trade near 10,000 pesos. If the share rises 5% but the implied exchange rate falls 5%, your peso price barely moves — both figures are illustrative, but the mechanic is the point.

What people most often get wrong

You can be completely right about the company and still lose money in pesos, or wrong about it and still gain, because the implied exchange rate moves independently. Also check the ratio and the trading volume before buying: a thinly traded CEDEAR can have a wide gap between the buy and sell price, which is a real cost on the way in and again on the way out.

Frequently asked questions

Do I own the foreign share itself?

No. You own a certificate issued locally that represents a defined fraction of a share held by a depositary. Economically you follow the underlying, but legally it is a different instrument, issued under Argentine rules and traded on the local exchange.

Why do two CEDEARs on similar companies have very different prices?

Mostly because of the ratio. One certificate may represent a twentieth of a share and another a fifth, so the peso prices are not comparable until you adjust for how much of the underlying each certificate actually contains.

Educational content only — not financial or tax advice. Rates, limits and tax rules change: confirm current figures with the regulator or tax authority before deciding.