Abstract

The aim of this study is to (1) evaluate the effect of the Covid-19 pandemic on the growth of the Indonesian capital market (IDX); and (2) assess the influence of externalities and social distancing policies on the dynamics of the Indonesian capital markets progress. The case study approach is paired with a statistical research methodology that allows the use of dummy variables in multiple regression. The dependent variable is IDX, while the independent variables are the amount of Covid-19 instances in Indonesia, China, and Spain, the FTSE100 (London), Hangseng (Hong Kong), and NASDAQ (New York) stock indices, as well as differences in Indonesias social distancing policies (Satgas, WFH and PSBB). According to the studys conclusions, both internal and external influences influenced the IDXs push. Inside Indonesia, the financial market has been impacted by the Covid-19 pandemic and social distancing policies. The Covid-19 pandemic in China and Spain had an impact on the ISHG index externally. Likewise, Hong Kong, London, and New Yorks capital markets.

Highlights

  • Coronavirus Disease 2019 (COVID-19) has developed into a pandemic, a worldwide outbreak that has spread to almost every country on Earth

  • The decline was still triggered by the spread of the coronavirus

  • The pandemic of Covid-19 in China and Spain had an impact on the dynamics of the Indonesian stock market (IDX index)

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Summary

Introduction

Coronavirus Disease 2019 (COVID-19) has developed into a pandemic, a worldwide outbreak that has spread to almost every country on Earth. As of the November 2020 weekend, there were at least 62.5 million people (1.4 thousand of whom died) infected across 212 countries. This epidemic has caused fear for over 8.9 billion people across Asia, America, Europe, Australia, Africa, and Antarctica. The capital market is a means of funding for companies and other institutions, and as a means for investing activities. Director of Investa Saran Mandiri Hans Kwee (2020), the determination of the status of the coronavirus as a pandemic by the World Health Organization (WHO) adds to market concerns, thereby suppressing stock movements. The decline occurred due to the decrease in people investing in shares

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