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All Journal The Contrarian: Finance, Accounting, and Business Research
Lawren Julio Rumokoy
Sam Ratulangi University
Decision Sciences, Operations Research & Management Economics, Econometrics & Finance Social Sciences

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World uncertainty and IPO underpricing: Evidence from Indonesia in the post-COVID-19 period Jan Sen; Lawren Julio Rumokoy; Victoria N. Untu
The Contrarian : Finance, Accounting, and Business Research Vol. 5 No. 1 (2026)
Publisher : Yayasan Widyantara Nawasena Raharja

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.58784/cfabr.467

Abstract

This study investigates the effect of global uncertainty on IPO underpricing in the Indonesian capital market during the post-COVID-19 period. Drawing on information asymmetry theory and signaling theory, we argue that elevated global uncertainty amplifies adverse selection risk and widens the informational gap between issuers and investors, thereby increasing the degree of underpricing. Using a sample of 145 IPOs listed on the Indonesia Stock Exchange (IDX) between 2023 and 2025 and employing ordinary least squares (OLS) regression, we find that the World Uncertainty Index (WUI) is positively and significantly associated with IPO underpricing, consistent with the prediction that heightened macro-level uncertainty intensifies investor risk perception and compels underwriters to set deeper offer price discounts. Additionally, underwriter reputation is negatively and significantly related to underpricing, indicating that reputable underwriters serve as credible quality signals that mitigate information asymmetry and improve pricing efficiency. Firm-level variables, including return on assets, firm size, firm age, and number of shares offered, do not exert significant effects on underpricing, suggesting that macro-level uncertainty dominates firm-specific fundamentals as the primary pricing force during this period. These findings contribute to the emerging literature on global uncertainty and IPO markets by providing the first empirical evidence from Indonesia using a globally aggregated uncertainty measure, and offer practical implications for issuers, investors, underwriters, and market regulators.
Capital market reaction to the United States-China trade war: an event study of abnormal return, trading volume activity, and market capitalization in Indonesian coal sub-sector companies Gio Andri Alkana Ginting; Lawren Julio Rumokoy; Emilia Margareth Gunawan
The Contrarian : Finance, Accounting, and Business Research Vol. 5 No. 2 (2026)
Publisher : Yayasan Widyantara Nawasena Raharja

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.58784/cfabr.484

Abstract

This study examines the capital market reaction to the United States-China trade war among coal sub-sector issuers listed on the Indonesia Stock Exchange (IDX), using an event study approach with Abnormal Return (AR), Trading Volume Activity (TVA), and Market Capitalization (MC) as reaction indicators. The final sample consists of 14 coal sub-sector companies selected through purposive sampling based on continuous listing, absence of confounding corporate actions, and complete price/volume data throughout the observation period. The event window spans 29 trading days (t−14 to t+14) surrounding the tariff escalation of April 16, 2025 (t=0), preceded by a 15-trading-day estimation window (t−29 to t−15) used to construct the expected return under the Mean-Adjusted Model. Because the AR, TVA, and MC data did not fully satisfy the normality assumption under the Shapiro-Wilk test, the non-parametric Wilcoxon Signed Rank Test was used for hypothesis testing. The results show no statistically significant difference in AR before and after the event (Z = -0.408, p = 0.683), whereas TVA (Z = -2.480, p = 0.013) and MC (Z = -3.296, p = 0.001) both differ significantly. These findings indicate that the trade war was not strong enough to alter abnormal profits captured through returns, but significantly affected trading activity and the market's valuation of coal issuers, suggesting that the reaction was channeled primarily through liquidity and valuation responses rather than price adjustments. Theoretically, this study extends the Efficient Market Hypothesis and geopolitical risk theory by showing that market efficiency can manifest asymmetrically across reaction channels; practically, it offers investors, portfolio managers, and issuers in China-exposed commodity sectors an evidence-based basis for monitoring liquidity and valuation signals, rather than price movements alone, during periods of trade-policy escalation.
Co-Authors Emilia Margareth Gunawan Gio Andri Alkana Ginting Jan Sen Victoria N. Untu