The Effect Of Fear Sentiment On Covid-19 On IPO Underpricing Moderated by Government Intervention
Rahadian Abby Putra (a*), Arief Wibisono Lubis (b)

(a) Faculty of Economics and business, Universitas Indonesia, Gedung Dekanat FEB UI Kampus Widjojo Nitisastro, Jl. Prof. DR. Sumitro Djojohadikusumo, Kukusan, Kecamatan Beji, Kota Depok, Jawa Barat 16424

(a) Faculty of Economics and business, Universitas Indonesia, Gedung Dekanat FEB UI Kampus Widjojo Nitisastro, Jl. Prof. DR. Sumitro Djojohadikusumo, Kukusan, Kecamatan Beji, Kota Depok, Jawa Barat 16424

Abstract

The purpose of this article is to find out the effect of the sentiment of fear over Covid-19 on IPO Underpricing shares moderated by government intervention. Covid-19 shapes a negative sentiment on investor, and it is accosiated with a decline in stock prices. Descriptive statistics and Multiple Linear Regression are used to describe the data in this study and the effect of the independent variable and moderating variable on the dependent variable. Our findings in this paper imply that the fear sentiment on Covid-19 has a positive effect on underpricing, whereas the effect of government intervention as measured by the stringency index increased the effect of fear sentiment on Covid-19 on underpricing. This paper can be a reference for investors in making investment decisions during times of high uncertainty, such as during a pandemic. While this study is a preliminary analysis of the impact of pandemic fear on short-term IPO performance, the industry effects is not yet considered and could be a subject for future research.

Keywords: Underpricing, Capital Market, Government Intervention, Stringency Index, Covid-19

Topic: Financial Management and Accounting