RT Journal Article
SR Electronic
T1 ADRs and U.S. Market Sentiment
JF The Journal of Investing
FD Institutional Investor Journals
SP 87
OP 95
DO 10.3905/joi.2003.319572
VO 12
IS 4
A1 Jungwon Suh
YR 2003
UL https://pm-research.com/content/12/4/87.abstract
AB American Depositary Receipt share prices tend to diverge from parity values in the presence of foreign ownership restrictions on underlying shares and other capital barriers. A study of the time series behavior of ADR premiums or discounts under such market imperfections allows examination of the existence of a U.S. market-specific sentiment. The evidence in a sample of ADRs from emerging countries indicates that some ADR premium or discount changes are correlated with aggregate U.S. market returns. The evidence suggests that although ADRs are shares of foreign firms, their price movements are influenced by U.S. market sentiment because they are traded in the U.S.