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Business Definition for: kaffirs
Dictionary of Finance and Investment Terms
kaffirs

informal term for South African gold mining shares traded on the London Stock Exchange . These shares are traded over the counter in the U.S. in the form of American Depositary Receipts, which are claims to share certificates deposited in a foreign bank. Under South African law, Kaffirs must pay out almost all their earnings to shareholders as dividends. These shares thus not only provide stockholders with a gold investment to hedge against inflation, but also afford substantial income in the form of high dividend payments. However, investors in Kaffirs must also consider the political risks of investing in South Africa, as well as the risk of fluctuations in the price of gold.

See also American Depositary Receipt (ADR)
Related Terms:
American Depositary Receipt (ADR)

receipt for the shares of a foreign-based corporation held in the vault of a U.S. bank and entitling the shareholder to all dividends and capital gains. Instead of buying shares of foreign-based companies in overseas markets, Americans can buy shares in the United States in the form of an ADR. ADRs are available for hundreds of stocks from numerous countries. Those, called Sponsored ADRs, which are issued in cooperation with the foreign company whose equity shares will underlie the related American Depositary Share (ADS), are eligible for listing on a major U.S. exchange and afford the shareholder rights and benefits associated with direct ownership, such as voting rights, and the right to receive reports. Unsponsored ADRs, issued without the involvement of the underlying foreign company, may not have such rights attached and the shares generally trade over-the-counter.

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