Impact of Government Budget Announcement on Stock Market Sector Indices: Evidence from Colombo Stock Exchange

Edirisinghe, Udani Chathurika

doi:10.11648/j.jfa.20170506.12

Cited by 1 publication

(2 citation statements)

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“…Information related to budgets and economic policies conveyed in government budget documents can stimulate or weaken the price of shares of companies listed on the stock exchange. Consequently, the reaction of investors on the stock exchange will depend on the impact of budget policy on the industry (Edirisinghe, 2017). Therefore, the author wants to see the effect of government budget approval on capital market movements in Indonesia.…”

Section: Frameworkmentioning

confidence: 99%

“…Information related to financial budgets and policies conveyed in government budget documents can stimulate or weaken companies' shares on the stock exchange. Consequently, investors' reactions to the stock exchange will depend on the impact of budget policy on the industry (Edirisinghe, 2017). If the government budget predicts the economy will be good in the next year, the company's revenue and dividend growth forecasts will increase, thus pushing up share prices.…”

Section: Introductionmentioning

confidence: 99%

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The Effect of State Budget Ratification and Expenditure on The Indonesian Capital Market : An Empirical Study on The LQ 45 Index Shares

Bandiyono

Amalia²

2021

J. Keuang. dan Perbank.

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This study analyzes the market reaction to the State Revenue and Expenditure Budget (APBN) ratification using the event study method. The population in this study were all companies listed on the LQ45 index on the Indonesia Stock Exchange during the period 2009 to 2018, which could reach 101 emissions with a sample of 17 emissions through the purposive sampling technique. The criteria used in selecting the sample were that the stock was consistently in the LQ45 index from 2009 to 2018; the stock was active during the observation period. The share issuer does not take corporate action during the observation period to minimize the confounding effect (confounding effect). The analysis technique uses a paired sample t-test five days before and five days after the ratification of the State Budget (APBN). The results showed that the significant ratification events did not significantly differ in the average abnormal return and the average trading volume activity between before and after the event. There is no significant difference because market players have anticipated the information contained in the ratification event at the initial stage of its preparation.

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Section: Frameworkmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%