IMPACT OF STOCK REPURCHASE ANNOUNCEMENT ON INDONESIA STOCK MARKET REACTION 2015-2019

• Main Author: Eliezer Manurung, Cristian
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/64395
• Institution: Institut Teknologi Bandung

The research objective is to analyze the effect of stock repurchase announcements on market reactions that are reflected in abnormal return and trading volume activity in 2015-2019 as a guide for companies to make decisions in the present and the future regarding the same issue, considering that at the time of this research, many public companies in Indonesia conducted stock repurchase. This research uses secondary data which gathered samples of 64 companies listed on the Indonesia Stock Exchange (IDX) which conduct stock repurchase announcement during 2015-2019. This research uses the event study method with 5 days before and 5 days after the event as the event window and 30 days as the estimation period. This research use data analysis of normality test and statistical hypothesis test with the significance of 0.05. The results showed that there is no significant difference between before and after stock repurchase announcements for both variables. This result also in line with the analysis conducted for each industry sector for the comparison. This result caused by the presence of negative sentiment throughout the observation period such as the Brexit tragedy, elections in the US won by Donald Trump, and the issue of the trade war by the US-China, this makes the market does not yet have full trust in the Indonesian capital market. Based on the results of the study, it can be concluded that the stock repurchase announcement did not have a significant effect on the market reaction.