Stock Market Reaction to the Announcement of the Change of Minister of Finance of the Republic of Indonesia (An Event Study Analysis)

The objective of this study is to measure the response of the capital market to the announcement of the change in the Minister of Finance of the Republic of Indonesia by means of event study. Market response is calculated through abnormal return (AR), cumulative abnormal return (CAR), trading volume activity (TVA), and standard deviation (SD) of stocks of companies in the banking sector that are listed on Indonesia Stock Exchange (IDX). The event date for this study is set as September 8, 2025, where the change in the Minister of Finance was announced. The data observation period will employ an event window of 30 days before and 30 days after the event. The research sample will include banking stocks that were actively traded throughout the research period and that had all the required data. The secondary data used for the analysis will be the stock prices and trading volumes that are available from Indonesia Stock Exchange. The analytical procedures involve calculation of actual return, market return, abnormal return, average abnormal return, cumulative abnormal return, and trading volume activity. Testing of hypothesis is done by using One-Sample t-Test for AR and CAR and Paired-Sample t-Test for examining the difference in trading volume activity and standard deviation of stock prices before and after the event. It is shown from the results that there is a significant abnormal return and cumulative abnormal return at the announcement date, which implies that there is a capital market reaction to the event. Furthermore, the existence of significant difference in trading volume activity and stock standard deviation before and after the announcement indicates the change in trading activity and stock volatility of banks in the capital market. This research supports efficient market hypothesis and signaling theory, as information about the change of the Minister of Finance is useful information for investors.