Islam, Media and Education in the Digital Era

Proceedings of the 3rd Social and Humanities Research Symposium (SoRes 2020), 23 – 24 November 2020, Bandung, Indonesia

Atie Rachmiatie, Ike Junita Triwardhani, Alhamuddin, Cep Ubad Abdullah

• Publisher: Routledge
• Year: 2022
• Print ISBN: 9781032112640
• eBook ISBN: 9781000520156
• Topic: Business
• Subtopic: Government & Business
• Index: Business

The proceedings of the Social and Humanities Research Symposium (SoRes) shares ideas, either research results or literature review, on islam, media and education in the digital era. Some recent issues consists of innovative education in the digital era, new media and journalsm, islamic education, human wellbeing, marketing and fintech in terms of islamic perspective, economic welfare, law and ethics. It is expected that the proceedings will give new insights to the knowledge and practice of social and humanities research. Therefore, such parties involved in social and humanities research as academics, practitioners, business leaders, and others will acquire benefits from the contents of the proceedings.

Economic welfare in terms of Islamic perspective

Abnormal return of Indonesian Sharia Stock Index (ISSI) during the 2019 presidential inauguration

L. Sevriana

Faculty of Economics and Business-Management, Bandung Islamic University (Unisba), Bandung, Indonesia

A.Y. Mafruhat, M. Haviz & N. Noviani

Faculty of Economics and Business, Economics, Bandung Islamic University (Unisba), Bandung, Indonesia

DOI 10.1201/9781003219149-1

ABSTRACT: The movement of stock returns is the basis for investors to make decisions. With the growth in the number of long-term investors at ISSI, abnormal returns can be used to buy large quantities. This research is intended for Indonesian capital market investors at ISSI. The data were analyzed using the event study method from 4 October to 1 November 2019. The data analysis technique used is event study regression. The target output is the discovery of the response of the Indonesian Islamic stock index to the inauguration of the president and vice president from among scholars so that it can provide an overview of the management of abnormal returns for long-term investors in this situation. next term presidential election. The results of data processing carried out by the Research Team showed that there were many different movement patterns such as the sudden downfall of mining sector return and the uprising pattern at telecommunication sector. This means that even in every company, there is a different sensitivity to these Political Events.

1 Introduction

1.1 Background

The policy of the President of Indonesia at the end of his first term sparked a strong reaction, especially from the student group. Debates on the Draft Criminal Code and the KPK Bill encouraged students to take to the streets to ask for the cancellation of the plan. The mass action at each campus took place from Monday, 23 September 2019. Then from Tuesday, 24 September 2019 Students from various universities all over Indonesia came to the Parliament Building with more masses.

The President's response tends to be cold, namely by closing the road to the DPR building during the inauguration of DPR members. Considering that many victims had fallen, the issue of planning to hold further demonstrations was not realized. During the demo period from 23 September to the 7th day of the inauguration of the president and vice president, the capital markets tended to show negative reactions. Majority stocks experience price decline which also reduces returns can be seen Figure 1.

Figure 1. Majority stock movement during the study period.

(Source: Data processed 2019).

The Muslim population in Indonesia, which is estimated to reach 238,883,000 in 2035, makes the business potential of the Islamic capital market so promising in Indonesia (Ma’rufAbdullah 2013). Moreover, with the support from the Government in the form of the Indonesian Sharia Stock Index, Muslim investors in Indonesia can invest in stocks according to Sharia principles. The inefficient condition of the Indonesian capital market and the fact that third country markets tend to grow high, the Indonesian stock market still has the potential to continue to grow in the next ten years. The Indonesian capital market is still chosen to invest because it is the only market covered by the government. In an inefficient capital market, what is in the financial statements is not always reflected in the stock price. Stock prices and returns also tend to be easily affected by the latest political news and government policies.

Based on previous research, price movements and stock returns are negatively correlated (Bekaert & Wu 2000), Bekaert's research is based on feedback volatility. Conversely, based on research based on the leverage model, stock prices are influenced by return (Christie 1982). This research is based on Bekaert's volatility assumption which states that returns are influenced by stock price movements.

1.2 Problem formulation

The Indonesian Sharia Stock Index (ISSI) was launched in 2011. The requirement to become part of ISSI is that the company does not have a loan amount of more than 30% of the total capital. The inefficiency of the Indonesian capital market can even be seen from the reaction of the capital market before the ISSI was launched, where there is a change in stock returns that tend to be abnormal (Yanti 2012). The political event of the 2019 presidential inauguration has quite influenced the movement of stock returns in the Indonesian capital market. The formulation of the problem discussed in this study is "Is there a tendency for abnormal returns on the Indonesian Sharia Stock Index during the inauguration of the 2019 president and vice president?

2 Literature Review and Hypothesis

2.1 Literature review

An efficient capital market is a market in which stock prices and fundamental conditions are in harmony. The assumption of an efficient market is that there are no taxes and no regulations that limit capital market activities. In practice, investors' reactions to stock price movements cannot be considered the same (Hamid et al. 2010).

The information needed by investors regarding returns is divided into capital gains (price difference) and dividends. The decision whether dividends will be distributed or used as additional capital for the next period is determined by the manager depending on the company's potential to maintain continuity of dividend payments in terms of amount and timeliness. Efforts to reduce information asymmetry are reflected in the announcement of dividend distribution to primary markets (Ahmad & Wardani 2014).

The growth of the capital market in the ASEAN region is marked by the increasing number of companies going public. In Indonesia, the Indonesia Stock Exchange has even begun to invite and foster potential SMEs to conduct Initial Public Offering. The more companies that are listed on the IDX, it opens up the possibility that the investor's portfolio will increase. How...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of contents
• Preface
• Scientific Committee
• Organizing Committee
• Acknowledgements
• Economic welfare in terms of Islamic perspective
• Human wellbeing in Islam
• Innovative education in the digital Era
• Islamic education
• Law and ethics in terms of Islamic perspective
• Marketing and Fintech in terms of Islamic perspective
• Media, journalism, and transformation
• New media (impacts, benefits, and barriers)
• Author index