Abstract. This research examines the behavior of stock returns and trading volumes around the ex-dates of rightsissue offerings by firms listed in Jakarta Stock Exchange (now is known as Indonesia Stock Exchange, after themerger with Surabaya Stock Exchange) in the period of 2002-2007. This research describes the effect of warrantsissue which is combined with some rights issue. The methods of research used are event study, to examine thebehavior of abnormal returns and trading volumes around the ex-dates of rights issue; and regression, to helpdiscriminate among various hypotheses and identify factors that explain the abnormal stock returns associatedwith rights issue. The results are categorized in three sample groups: (1) a group of firms issuing rights withwarrant, (2) a group of firms issuing rights without warrants, and (3) a group of firms issuing rights in between2001-2006. Abnormal returns in this research are associated negatively with the amount of capital raise relativeto existing capital, and positively with the stock returns variance and the offer price as a fraction of firm?s stockprice.