Indonesian Stock Market Slow to Respond to Tech Investments

A recent study conducted by lecturers from the Faculty of Economics and Business at Gadjah Mada University reveals a slow response from the Indonesian stock market to information technology investments. Over the last two decades, companies globally have been heavily investing in technologies like ERP systems and e-commerce, anticipating boosts in their stock prices. However, the scenario in Indonesia unfolds differently. Unlike more developed markets, the Indonesian capital market is characterized by lower trading volumes, resulting in delayed reactions or even a lack of responses to investment announcements. The research by Professors Singgih Wijayana and Didi Achjari found no significant market reaction to IT investment announcements. Particularly, investor reaction is delayed as they cautiously await real business changes post-investment. Market participants prefer to ensure that these investments genuinely bring the expected efficiency and profit growth. The study emphasizes the importance of clear communication regarding the long-term business benefits of such investments, so investors can appropriately assess their potential value.