A note on the early effects of the US Presidential vote on Mexican ADR values

Mark Schaub ()
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Mark Schaub: Stephen F. Austin State University

Journal of Asset Management, 2017, vol. 18, issue 7, No 1, 515 pages

Abstract: Abstract The vote for US President that occurred on November 8, 2016, resulted in a surprising outcome for many investors. As a result, markets reacted in the USA and other countries. This study examines the short-term changes in the valuation of Mexican firms traded in the USA as American Depository Receipts and compares those results to the changes in the S&P 500 and the change in the value of the peso versus the dollar. Results show the ADRs lost over 7.7 per cent of their value after the election results were made known the following day. This compares to a 1. 1 per cent increase in the S&P 500 index and a 6.8 per cent decrease in the value of the peso that same day.

Keywords: international investing; American Depository Receipts; portfolio diversification; early wealth effects; event studies (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 G15 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1057/s41260-017-0043-x

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