Agus Arman

Type of the article: Research Article

Abstract
Political information released during presidential elections may affect financial markets differently depending on both the type of market and the credibility of the information. This study examines cross-market reactions to candidate declarations and independent quick count announcements across Indonesia's five direct presidential election cycles conducted between 2004 and 2024. A cross-market event study framework is employed to estimate abnormal returns for the LQ45 Index and the IDR/USD exchange rate using a 150-trading-day estimation window, with robustness assessed through alternative event windows and complementary non-parametric tests.
The results indicate that candidate declarations are not associated with statistically significant abnormal returns in either market. By contrast, independent quick count announcements are associated with a statistically significant positive abnormal return in the stock market on the announcement day, whereas the foreign exchange market exhibits comparatively weaker and less robust responses. Although exchange rate movements are directionally consistent with Rupiah appreciation following quick count announcements, the evidence is not consistently statistically significant across alternative inference procedures.
Overall, the findings suggest that political information is incorporated differently across financial markets and that the informational credibility of political announcements contributes to differences in short-term market reactions. The study contributes to the political finance literature by providing cross-market evidence from an emerging democratic economy while recognizing that the findings are based on five presidential election cycles and should therefore be interpreted with appropriate caution.