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

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  • Mark Schaub

    (Stephen F. Austin State University)

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.

Suggested Citation

  • Mark Schaub, 2017. "A note on the early effects of the US Presidential vote on Mexican ADR values," Journal of Asset Management, Palgrave Macmillan, vol. 18(7), pages 511-515, December.
    • Handle: RePEc:pal:assmgt:v:18:y:2017:i:7:d:10.1057_s41260-017-0043-x
    DOI: 10.1057/s41260-017-0043-x
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    More about this item

    Keywords

    international investing; American Depository Receipts; portfolio diversification; early wealth effects; event studies;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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