MARKET REACTION TO INDONESIA’S 2025 FINANCE MINISTER CHANGE

Abstract

The appointment of a new Minister of Finance on 8 September 2025 is a political–economic event that could influence investor expectations regarding fiscal stability and policy direction. This study aims to examine how the capital market responds to this event by analyzing abnormal returns and trading volume activity. Using an event study method, the sample consists of LQ45 stocks that reflect high market liquidity on the Indonesia Stock Exchange, observed over a window of T−5 to T+5. This study lies in its specific focus on the 2025 ministerial appointment, an event not previously examined, and the combined use of daily analysis and mean-difference testing to evaluate market reactions consistently. The findings show that the market exhibits reactions at several points surrounding the announcement date, as reflected in abnormal returns and trading volume. However, the comparative tests before and after the event indicate no significant differences, suggesting that the reactions are temporary and do not develop into short-term structural changes. These results imply that the market anticipates the appointment effectively, preventing sustained trading pressure. The study provides opportunities for further research with broader variables and sectoral coverage.