Event Study of PSBB Policy Announcement on March 31, 2020, for Restaurant, Hotel and Tourism Sector Companies

Abstract

Covid-19 has hit the world since the end of 2019. Covid-19 is a global epidemic that has a negative impact on the human and social dimensions. To overcome this, on March 31, 2021, the government established a PSBB (Large-Scale Social Restrictions) policy. The implementation of Large-Scale Social Restrictions (PSBB) is believed to be the most effective way to reduce the rate of transmission of the Corona virus. The sectors most affected by the spread of the Corona virus and the PSBB policy are the Restaurant, Hotel and Tourism sectors. The object of research in this study is the actual return, expected return and abnormal return. The event studied is the announcement of the PSBB (Large-Scale Social Restrictions) policy on March 31, 2020. The unit of analysis in this study is a company listed on the Indonesia Stock Exchange for the Restaurant, Hotel and Tourism Sector for the period 23 March 2020 to 7 April 2020. Return conditions shares in companies listed in the Restaurant, Hotel and Tourism sector during the observation event five days before and five days after the PSBB policy was set on March 31, 2020, most of the shares experienced unchanged conditions. The strongest reaction was shown on the fifth day before the incident and the weakest reaction was shown on the announcement day. Research advice is that investors and potential investors should not react immediately in every event that occurs, especially during the Covid-19 pandemic. Future researchers should expand the sample, period and research model. Future researchers can also use other events and can use other calculation methods such as trading volume.