514161069-Market-Reaction-Before-and-After-Coronavirus-Disease-2019-Announcement-in-Indonesia-on-Pha

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American Journal of Humanities and Social Sciences Research (AJHSSR) 2021 American Journal of Humanities and Social Sciences Research (AJHSSR) e-ISSN :2378-703X Volume-5, Issue-6, pp-419-424 Research Paper Open Access Market Reaction Before and After Coronavirus Disease-2019 Announcement in Indonesia on Pharmaceutical Sub Sector Companies I Wayan Agus Chandra1, Ketut Alit Suardana2 1,2 Faculty of Economics and Business, Udayana University, Bali, Indonesia ABSTRACT : On the 2nd March of 2020, Indonesia’s first two COVID-19 cases were confirmed. This study aims to analyze the market reaction before and after the announcement of COVID-19 in Indonesia on average by using the average abnormal return and the average trading volume activity. Event study approach is used to observe market reaction before and after announcement within 7 days window period. Market reaction proxied using average abnormal return and average trading volume activity. This research focuses on 10 pharmaceutical companies listed on the Indonesia Stock Exchange using a total sampling technique. Data were analyzed using wilcoxon signed rank test. The test results showed there is difference in average abnormal return before and after the COVID-19 announcement in Indonesia, but there is no difference in average trading volume activity. Keywords: COVID-19; Market Reaction; Abnormal Return; Trading Volume Activity I. INTRODUCTION “The capital market is a place where there is a mechanism for buying and selling long-term financial instruments between parties who have excess funds and those who need funds. Stocks are one of the most popular instruments because they are relatively easy to resell and provide greater profit potential. The movement of stock prices in the capital market has a tendency to be influenced by various available information, both information from internal and external sources. On Monday, March 2, 2020, Indonesia announced the discovery of a corona virus (COVID-19) case in Indonesia by confirming two positive people. The announcement of COVID-19 in Indonesia on March 2, 2020, became a point of weakness for the Indonesia Stock Exchange(IDX) Composite which closed down 91 points (1.67%) to the level of 5,361. In line with the IDX Composite, the consumer goods sectoral index also showed a temporary weakening. Different things happened to PT Indofarma Tbk (INAF) whose shares actually closed sharply higher 19.42% to the level of IDR 535/shares on the same day. The increase in INAF's stock price did not follow the market pattern but
seemed to react more quickly, PT Indofarma Tbk is a public company listed on the Indonesia Stock Exchange and is included in the consumer goods sector of the pharmaceutical sub-sector.” Pharmaceutical companies are the main supporters of the health sector in dealing with the pandemic situation. Severe Acute Respiratory Syndrome Coronavirus-2(SARS-CoV-2) is a new type of virus, so to create and develop drugs or vaccines will take time that may not be short. Although domestic pharmaceuticals are still

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