THE IMPACT OF INDONESIAN PRESIDENTIAL ELECTION THE 2019 ON ABNORMAL RETURN AND STOCK TRADING VOLUME ACTIVITY ON IDX (EMPIRIST EVENT STUDY ON STOCK LISTED IN THE LQ 45 INDEX IN 2019)

Ahmad Amrulah Arif,Sudjono Sudjono

doi:10.31933/dijemss.v2i6.972

Abstract

Political events can affect stock prices in economic or non-economic terms. The political events of the general election are quite interesting topics for testing the information content of stock prices on the IDX which is intended to measure market response using abnormal returns, average abnormal returns and trading volume activity as well as average trading volume activity. The purpose of this research is to be able to prove the difference between abnormal return, average abnormal return and trading volume activity as well as average trading volume activity after and before the 2019 Indonesian presidential election. The population of this study is the index published by the IDX and the sample in this study is 45 companies listed in the LQ 45 index. The type of research conducted is quantitative research and secondary data in this study were obtained from the Indonesia Stock Exchange (IDX) and Yahoo Finance. Analysis of the test data using the normality Kolmogrov-Smirnov test and the Ranking Test Wilcoxon because the observation time in the test is 7 days after and 7 days before the 2019 Indonesian presidential election. 2019 there is no significant difference to the average abnormal return and average trading volume activity.

Highlights

The role of the capital market is very important for a country's economy, because the capital market performs 2 tasks
The results of the different test on the average abnormal return after the 2019 general election with the abnormal return average before the 2019 general election proves that the 2019 general election has no significant change in abnormal returns during the 2019 Indonesian presidential election
The different test results on the TVA average after the 2019 general election with TVA after the 2019 general election resulted in the 2019 general election not proving significant results on TVA during the 2019 Indonesian presidential election

Summary

Introduction

The role of the capital market is very important for a country's economy, because the capital market performs 2 tasks. The main task, the economy has a task that says the capital market is as a forum for meeting 2 parties who have interests, among others, as owners of more capital (investors) and those in need of funds (issuers). The task, finance has a task that says that the capital market allows the opportunity to make profits for the owners of funds more in accordance with what they want. Events in politics can affect the decline in the level of interest of the parties who own capital, in situations of events in politics can pose a threat to the stability of the country so that it Available Online: https://dinastipub.org/DIJEMSS gives the impression of a negative response for capital market participants. The general election is a phenomenon of events that can attract a response from those who run the capital market (Ananto, 2014)

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