Brexit Announcement Effect on the New Zealand Stock Market

Mathew Abraham, Whitireia Business School

Abstract: This paper examines the reaction of the New Zealand stock market using an event study. The data for the study includes the NZX 50 Index and the closing prices of the 50 largest, eligible stocks listed on the Main Board (NZSX). The results are mixed showing a negative impact on the NZX 50 Index, while the abnormal returns of the NZX50 stocks around the Brexit referendum date are positive. A probable reason for the mixed result is that the post-Brexit institutional arrangements are yet to take place, whereas there is an expectation of opportunities that could arise for New Zealand firms in the UK and the European markets due to Brexit.

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