The Merger and Performance: The Case of Indonesia Stock Exchange

Abstract

The mergers and acquisitions activity of the stock exchanges have some motives and benefits The larger scope of the stock exchange after merger would pull the bigger firms to join the stock exchange will increase the trading volume and the position will be more strategic because the M&A make the market covered more wider area it’s make decrease the border barrier cross country (Nielsson 2009) After 30 October 2007 in Indonesia only has one stock market named Indonesia Stock Exchange (IDX) Surabaya Stock Exchange was merged into Jakarta Stock Exchange As a result JSX changed its name into the Indonesia Stock Exchange-IDX in the end of The Headquarter of Indonesia Stock Exchange is in Jakarta the same with pervious Jakarta Stock Exchange and the consequently the Surabaya Stock Exchange was closed and in Surabaya city there is no stock exchange anymore And the study want to investigate the impact of Indonesia stock exchange merger to stock exchange performance (composite indices) which we want to examine the influence of stock market merger events with the liquidity and also the merger events related to the market efficiency The framework of the research related with the liquidity and market efficiency The ordinary least square would be used to know what the impact of the merger into stock exchange is and how is the relationship between turnover as dependent and independent factor such as firm characteristic trading volume and industrial production index influenced by merger for the liquidity Then the price change as dependent variable and market return as the independent variable for the merger effect to the market efficiency The findings of the research are that the merger event does not increase the liquidity in general but the merger event has positively significant effect to the market efficiency

Date of Award	2014 Feb 5
Original language	English
Supervisor	Ann Shawing Yang (Supervisor)