Analysis Of Market Reactions To The Appointment And Inauguration Of The President Of Indonesia

DOI

10.2991/978-94-6463-994-0_37How to use a DOI?

Keywords

Abnormal Return; Trading Volume Activity; Market Efficiency; Event Study

Abstract

This study investigates investor responses to two key political events in Indonesia’s 2024 leadership transition: the official announcement of the President-elect and Vice President by the General Elections Commission KPU and their subsequent inauguration. Using an event study approach, the analysis focuses on abnormal return AR and trading volume activity TVA of firms listed in the LQ45 index within a 21-day event window surrounding each event. A one-sample t-test reveals significant AR on several days around the KPU announcement, indicating that the event carried relevant information for investors. However, both early speculation and delayed responses point to inefficiencies in how the market priced this information. Conversely, the inauguration event did not produce significant AR but triggered a consistent rise in TVA, suggesting speculative trading activity rather than a response to new information. These contrasting patterns highlight a disconnect between information flow and investor behavior, indicating that the Indonesian capital market does not fully conform to the semi-strong form of market efficiency. The market appears inefficient in both processing political information and supporting informed investment decisions, as evidenced by the timing and nature of investor reactions. This suggests a need for improved transparency and information dissemination in emerging markets like Indonesia.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Wahyudi Ananta
AU  - M. Riduan
AU  - Eddy Suranta
AU  - Pratana Puspa Pratama
PY  - 2026
DA  - 2026/02/23
TI  - Analysis Of Market Reactions To The Appointment And Inauguration Of The President Of Indonesia
BT  - Proceedings of the 24th Malaysia-Indonesia International Conference on Economics, Management, and Accounting (The 24th MIICEMA) in conjunction with The 9th Sriwijaya Economics, Accounting, and Business Conference (The 9th SEABC) (MIICEMA-SEABC 2025)
PB  - Atlantis Press
SP  - 539
EP  - 558
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-994-0_37
DO  - 10.2991/978-94-6463-994-0_37
ID  - Ananta2026
ER  -