The Impact of the Israel and Palestine Conflict on Market Reactions of Companies Affiliated with Israel

  ABSTRACT : Stocks is a volatile investment instrument, one of the factors is an event that can give an effect to investor reactions. The purpose of this research is to determine the impact of the Israel and Palestine conflict, which sparked the Boycott, Divestment, and Sanctions (BDS) movement on October 9, 2023 on the stock market reaction in Indonesia. This research approach uses a quantitative approach with a comparative type of research. The study conducted on eight affiliated companies with Israel that listed on Indonesia Stock Exchange, using a saturation sampling method. The analysis technique use Event Study analysis with the theories use Signaling Theory and Efficient Market Hypothesis Theory, with calculations based on abnormal returns. The research results showed that there is no significant difference in abnormal returns before and after the event, but there is a market reaction around the event period.

KEYWORDS : Stocks, Event Study, Signaling Theory, Efficient Market Hypothesis