THE INFLUENCE OF PRESIDENT REPUBLIC INDONESIA RESULT ELECTION ANNOUNCEMENT TO INDONESIA CAPITAL MARKET SECTOR'S

• Main Author: RAHMADI (NIM : 29107368); Pembimbing: Ir. A. Imam Istiyanto, MBA, SAID
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/17137
• Institution: Institut Teknologi Bandung

For most developed markets (USA, UK and Canada), most studies conclude that political elections have a statistically effect in stock prices. It is because of the rule that will be made by the new government can affect the profit of companies, this mean, it also affect the dividend that investor will accept. The connection between political elections and the stock price has been proved once the votes were counted Tuesday night, it was clear that George Bush had won a second term. The stock market reacted to this outcome with the largest overnight increase in more than a year. <br /> <br /> <br /> Based on the background this research is aimed to observe reaction of nine JASICA based sectors in Jakarta Stock Exchange it is Agricultur, Mining, Basic Chemical Industry, Miscellaneous Industry, Consumer Good, Construction, Property, Infrastructure, Finance, and <br /> <br /> <br /> Trade or Service to the national political events. This research is focusing on the Announcement of Presidential Republic Indonesia Election Results The event study method witch applied in this research, are using eleven days length for window event period, five days before and five days after the event. The reaction is approximated by significant average abnormal return and <br /> <br /> <br /> significant difference of average abnormal return between before event date and after event date during the event window period. The results show various abnormal returns from each industrial sector in each years political event and generally there are no significant differences of average abnormal return between before and after political event during the event window period. <br /> <br /> <br /> This is can be coused by some reason that is the presiden candidate on their campaign did not explain clearly and specifically in their future economic policy, investor are not using the president result election information to made their investment decision, and too many parties made iche parties doesn’t look different, which means who ever be the presiden will not made a big different in their economy policy. It's conclude from this research showed that the Indonesian stock market are an weak form efficiency market where the stock price are not fully reflect, not like in di <br /> <br /> <br /> U.S.A, U.K, and Canada.