The Impact of Covid-19 on Share Price Index in Indonesia

Abstract

This study aims to examine the effect of a pandemic on share price index (IHSG),  analyzing the influence of externalities on the dynamics of capital market developments in Indonesia,  and examining whether differences in social distancing policies affect the dynamics of the Indonesian capital market movements. The research method uses quantitative analysis with a dummy variable multiple regression approach. JCI as the dependent variable, whereas the independent variable is the number of cases of the Covid-19 pandemic in Indonesia, China and Spain, then the movement of the FTSE100 (London),  Hangseng (Hong Kong) and NASDAQ (New York) stock indexes, as well as differences in social distancing policies in Indonesia ( Task Force, WFH and PSBB). Finding of this study is that the movement of the composite stock index (IHSG) in the Jakarta Stock Exchange is affected by the internal and external conditions. Internally, the conditions of the Covid-19 pandemic and domestic social distancing policies (WFH and PSBB) have affected the dynamics of the capital market (indicated by the movement of the JCI index on the JSE). Externally, the Covid-19 pandemic in China and Spain also affecting the dynamics of the capital market in Indonesia (IHSG index). Likewise, the dynamics of the stock market in Hong Kong (Hangseng), London (FTSE100) and News York (NASDAQ). The coronavirus pandemic in Indonesia, China, the dynamics of the Nasdaq stock market in New York, and social distancing policies (WFH and PSBB) have had a negative impact on the movement of the JCI stock index. While the pandemic in Spain, the dynamics of the capital market in Hong Kong (Hangseng) and London (FTSE100) actually had a positive impact on the conditions of the capital market in Indonesia (BEJ).