09/09/96 HOW AMERICANS CAN BUY STOCKS OVERSEAS (int'l edition)

HOW AMERICANS CAN BUY STOCKS OVERSEAS (int'l edition)

Let's say you want to buy 100 shares of Castorama Dubois, a French do-it-yourself chain. Castorama trades in Paris and doesn't list American depositary receipts--instruments representing ownership of shares overseas--on any U. S. exchange. But you can still buy the stock. Here's how:

MAKING A TRADE: Several full-service and discount brokers, including Merrill Lynch, Charles Schwab, Marquette de Bary, and Barry Murphy & Co., trade international equities. They'll quote a price in dollars, translated from the local currency. Castorama, for example, was trading at about 980 French francs on Aug. 27. Schwab's price per share: $195.

ADRS VS. SHARES: When a company has ADRs, brokers say you'll probably get a better deal buying them instead of shares trading abroad. But for many small-capitalization and emerging-market issues, you may have to go overseas.

COMMISSIONS: Some brokers charge the same for domestic and foreign trades. Schwab, for example, would charge $55 to buy 100 Castorama shares. Others may pass through an additional custody fee of $75 levied by dealers who clear brokers' trades. ADRs don't carry such fees.

CUSTODY: Your broker probably will hold your shares, and that's probably for the best. Foreign share certificates are costly to obtain. They are even more costly to replace if you lose them.

DIVIDENDS: Your broker will collect and pass dividends to you, in dollars.

TAXES: Many countries withhold taxes on dividends. Your broker will report the amounts withheld on each company you own. You'll then have to file with the Internal Revenue Service for any credits you may be due on these sums.

RISKS: Your shares will be denominated in foreign currencies, so their value will fall when the dollar goes up and rise when the dollar declines. Overseas markets can be illiquid, so you may not be able to get the best price. And you might face delays in receiving proxies or tender offers.

DATA: BUSINESS WEEK SURVEY OF BROKERS