Abstract
An interesting aspect of the public information arrival effect that has not been covered is the impact of global financial crisis (GFC) on banking stocks in Indonesia. The aim of this research is to investigate market reaction of banking stocks at the Indonesia Stocks Exchange (IDX) towards economic events on GFC regarding the events of the bankruptcy of Lehman Brothers on 15 September 2008 and the closing of IDX on 8 October 2008. In this research, the researchers conduct event study to explore the reaction of stock market regarding of these events on banking stocks. The results of this study find that there was a weak impact of the Lehman Brothers collapse towards banking stocks, however, there was a pretty strong impact of the IDX closure towards banking stocks at IDX.
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