Do Companies Consider Market Timing in Issuing Stock in Indonesia

Abstract

The purpose of this research is to indicate equity market timing behavior on companies in Indonesia when those firms issued their share by using cumulative abnormal return as a proxy to predict market timing. Samples in this research are non-financial companies with seasonal or initial shares issued during 2014-2020 and listed on Indonesia Stock Exchange. The results of this study show that cumulative abnormal return before the shares are issued positively affects capital raised. In contrast, cumulative abnormal return after issuing shares negatively affects capital raised. This result shows that non-financial companies in Indonesia practice market timing behavior that can be indicated by using their stock's cumulative abnormal return.