Mexican exporting firms outperform market amidst devaluation expectations.
The study looked at how different companies in Mexico performed in the stock market during the 1994/95 crisis. Surprisingly, companies that exported goods did better than expected, even though the peso was thought to be overvalued. This suggests that companies were expecting the peso to lose value. The study suggests that how well certain sectors do in the stock market could give clues about future changes in exchange rates in emerging markets.