Impact of 2019 General Election on Abnormal Return in Indonesia

ABSTRACT: An event both economic and non-economic event must have information that affect stock market.One of the event that allegedly have an impact on stock market is general election. This study aims to determinethe impact of 2019 Indonesian General Election on abnormal return. This study uses event study method withsample consist of 93 companies that listed on Kompas100 index. The model used to calculate the expectedreturn is mean adjusted model. The result of this study is 2019 General Election event cause negative butinsignificant impact on abnormal return before and after the election took place. This indicate that investor hasalready expecting the result of the general election, and negatively perceived 2019 general election event due tofraud and scandalsthat surround the 2019 Indonesia General Election.

Keywords –Event Study, General Election, Abnormal Return, Stock Market, Mean Adjusted Model