THE globalisation of investors' appetite has convinced Wing Hang Bank to become the third Hong Kong bank to launch an American Depositary Receipt (ADR) programme, after Hang Seng Bank and Bank of East Asia. This sponsored level-one programme involves only existing shares, and no new shares will be issued. ''It is a good vehicle to expand our distribution network. It will facilitate US investors in buying the bank's shares,'' said Raymond Li Wing-hung, the bank's deputy chief executive. Since level-one ADRs are traded over the counter with US brokers who are market-makers in the stock, investors will not be constrained by the time difference between Hong Kong and the US. Indeed, a diversified investor base can exert a stabilising effect on the share price. ''Since investors from different geographical locations will have different views on the share, the divergence will reduce the chance of sudden fluctuations in the share price,'' a spokesman from the Bank of New York said. Mr Li said: ''The ADRs will help raising the international profile of the bank, albeit it is a local one.'' Disputing the claim that local banks might not benefit from raising their international reputation, Mr Li said the bank's certificate of deposit (CD) issue launched earlier this year had been given a warm reception by many overseas institutional investors. He said: ''Besides, the recent rallies in the local stock market were prompted by foreign investors. A lot of shareholders of Hong Kong-listed companies are not local people any more. ''Even though Wing Hang is a local bank, the foreign exchange activities which are done 24 hours on a worldwide basis have globalised local banks' operation.'' Apart from enlarging the investor base and raising the company's profile globally, companies may want to use ADRs to test a new market which can become another fund-raising avenue. The Bank of New York spokesman said companies could upgrade their level-one programme to level three, which is similar to a direct listing, and then raise capital through issuing new shares. Mr Li said: ''We have no immediate plan to raise funds through this channel. The reporting requirements for Hong Kong and the United States are very different.'' He pointed out that the bank could raise capital by issuing debt instruments such as CDs, not only through equity-related papers. Companies which want to either list their securities on an exchange in the US or raise capital will use the level-three programmes which require adherence to the much stricter US reporting regulations. A company having a level-one programme needs only to provide the same type of information to US investors as it offers to local clients. The programme intends to allow non-US companies to realise the benefits of a US listing without changing its current reporting process. Bank of East Asia and Hang Seng Bank have issued ADRs, although Hang Seng's unsponsored programme is somewhat different in that the company itself is not involved. ''The issue stemmed from a few brokers who believed that there would be investor interest in the Hang Seng Bank stock and decided to be market-makers,'' the Bank of New York spokesman said. However, since 1988 the US Securities and Exchange Commission, finding it difficult to control the issue of unsponsored ADRs, has ceased to give approval to such issues and existing ones are encouraged to convert to sponsored status, with the permission of the company involved.