The Stock Market Reaction of Energy Sector to The Regulations Approval and The Carbon Exchange Publishing in Indonesia

DOI

10.2991/978-94-6463-585-0_21How to use a DOI?

Keywords

Average abnormal return; trading volume activity; carbon exchange; event study

Abstract

Social and environmental issues are significant concerns globally, as evidenced by the establishment of various financial institutions that have incorporated sustainable development practices. Indonesia has taken concrete steps carried out by the Financial Services Authority, by establishing a Carbon Exchange through Financial Services Authority Regulation Number 14 of 2023 concerning Carbon Exchange, which was approved on August 2, 2023. The Carbon Exchange itself was officially released on September 26, 2023. Research related to event study was first conducted by Ball and Brown in 1968. Given that event study research is still relevant today and the Carbon Exchange is still relatively new and related to companies operating in the energy sector, the author wants to conduct research on the reaction of the energy sector stock market to the Carbon Exchange. The result of this research is Average Abnormal Returns (AAR) and Trading Volume Activity (TVA) have a significant difference before and after the ratification of the regulation and weakens when the Carbon Exchange issuance event occurs. Additionally, non-event testing revealed a significant difference in AAR, potentially indicating information leakage, as several national press reported the plan to ratify the regulations in June 2023, while the launch of the Carbon Exchange occurred in September 2023.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Adhytya Bagus Rizkianto
AU  - Intan Nurul Awwaliyah
AU  - Arnis Budi Susanto
AU  - Isti Fadah
AU  - Hadi Paramu
PY  - 2024
DA  - 2024/12/11
TI  - The Stock Market Reaction of Energy Sector to The Regulations Approval and The Carbon Exchange Publishing in Indonesia
BT  - Proceedings of the 5th International Conference on Global Innovation and Trends in Economy 2024 (INCOGITE 2024)
PB  - Atlantis Press
SP  - 293
EP  - 302
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-585-0_21
DO  - 10.2991/978-94-6463-585-0_21
ID  - Rizkianto2024
ER  -