The purpose of this study was to determine the effect of Donald Trump’s presidential election against abnormal return in the global index. This study uses event studies conducted on the index data from May 2015 until February 2017. Where Donald Trump Presidential election event is divided into four events, the first time to run, the second win in the primaries, the third time as the current elected Trump’s and the fourth as inauguration. This study uses the event window (-5, + 5) and (-15, + 15) of each event, the next step is to calculate the actual return and calculate the expected return using the moving average method. The results showed that most events are considered important by investors is when Trump won in primaries election. This happened because of many factors that occur around the events that influence the abnormal returns, such as the Turkish military coup, and the referendum Brexit. The only index that responded consistently in almost every event is an index of China (SSE) and the American index (S & P 500 and the Dow Jones). When Trump was elected largely global investors responded positively, but in developing countries the index has a negative response.
Keywords: US Presidential Election; Trump election; abnormal return; event study; moving average
This work by European American Journals is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License