DOCSLIB.ORG

JASF Journal of Accounting and Strategic Finance

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
JASF Journal of Accounting and Strategic Finance Journal of Accounting and Strategic Finance ISSN 2614-6649 (online) JASF Vol.1 No.01 June 2018, pp. 57-68 http://jasf.upnjatim.ac.id FACTORS INFLUENCING THE STOCK PRICE OF BANKING COMPANIES IN THE INDONESIA STOCK EXCHANGE Muria Kartika Perdana, Constance Henryette Adriana1 1Accounting Department, PT PT. Prambanan Dwipaka, Jalan Ngagel Jaya Tengah, Surabaya, East Java , Indonesia. DOI: https://doi.org/10.33005/jasf.v1i01.26 Received: September 12, 2018. Revised: October 10, 2018. Accepted: October 24, 2018 Abstract The banking sector is the industry most regulated by the government given the importance of this sector in the country's economy as a bridge for financing the real sector. Stocks in the banking industry are one of the stocks that are highly sought after by investors. Banks that have good health will attract many investors. The purpose of this study is to prove the influence of the bank's health level – risk profile and good corporate governance – on stock price in the banking sector companies on the IDX. The data used in this study are second- ary data in the form of financial statements of banking companies. The independent varia- bles in this study are risk profile and GCG, which consist of Non Performing Loans (NPL), Interest Rate Risk (IRR), Loan to Deposit Ratio (LDR), Managerial Ownership, Institution- al Ownership, Independent Commissioner, Size of Board of Directors, Committee Audit and dependent variable Share Price. The sampling method in this study was purposive sampling with a sample of 7 banking companies registered on the Indonesia Stock Exchange. Stock price are the closing price on Yahoo Finance. The data analysis technique used is paramet- ric statistical test – multiple linear regression analysis and classical assumption test, in- cluding normality test, autocorrelation test, multicollinearity test, and heteroscedasticity test. Test of hypothesis used the R Square test, partial t test, and F test. The results of the study prove that the Non Performing Loan (NPL), Independent Commissioner, and Audit Committee variables have no influence on the Stock Price. However, the Interest Rate Risk (IRR), Loan to Deposit Ratio (LDR), Managerial Ownership, Institutional Ownership, and the Size of the Board of Directors have effect on Stock price. Keywords: Non-Performing Loan (NPL), Interest Rate Risk (IRR), Loan to Deposit Ratio (LDR), Managerial Ownership, Institutional Ownership, Independent Commissioner, The size of the Board of Directors, the Audit Committee, and stock price How to cite (APA 6th style) Perdana, M.K. & Adriana, C.H. (2018). Factors Influencing the Stock Price of Banking Companies in the In- donesia Stock Exchange . Journal of Accounting and Strategic Finance, 1 (01), 57-68 INTRODUCTION The capital market is a meeting between parties who have excess funds with those who need funds by trading securities. In this case the capital market has an economic function which is to provide facilities or a place to bring together two parties who need funds and those who are excess funds (investors). Trade between the shortcomings (bidders) and excess funds (buyers) is traded in a supporting institution, namely the Indonesia Stock Exchange (Tandelilin, 2010: 28). Stock price can provide clues to the conditions of capital market activities and investors in conducting share trading. Investors must be able to analyze a stock to be able to make the right decision in order to get dividends or capital gains (Tandelilin, 2010: 28). 1Constance Henryette Andriana Email: [email protected] The banking industry is one industry that participates in the capital market, in addition to other industries, such as manufacturing, agriculture, mining, property and others. The bank is one of the institutions that acts as a financial intermediary between parties who have funds and those who need funds, as well as institutions that function as a bridge for financing the real sector. One of the factors that investors consider in choosing a company to invest in is the perfor- mance or health of a company itself. The better the performance of a company, the higher the profitability of the business and the more profit that can be obtained by shareholders. Thus, that the company will be trusted by the community because it has a good reputation and ultimately can increase stock price. With a high business value, investors will look at the company to invest, so there will be an increase in shares. Even so, sometimes the company's shares that have good per- formance, the stock price may decline. Bank performance assessments are carried out every year to determine whether there is an increase or decrease in performance. For banks whose health is increasing, this is not a problem, because that is what the bank expects to be able to maintain its health. However, for banks that continue to be unhealthy, may encounter a problem. They may have to receive direction or sanc- tions from Bank Indonesia to suggest management, merger, consolidation, acquisition, or even liquidation of their existence if indeed the condition of the bank is severe. This is done to protect and create a sense of security for the community, especially Indonesian capital market investors. The use of company information by investors and prospective investors will influence their deci- sion in choosing the shares to buy. This was proven by Yahoo Finance (2016), which showed that the banking industry in the past four years was fluctuating. The following is a list of developments in stock price based on the closing price in several banking companies that have been consistently registered on the Indonesia Stock Exchange for the past four years. During 2010-2014, the company's shares showed good development, this can be observed in almost all companies that experienced an increase, for exam- ple Bank Central Asia Tbk. (BBCA.JK) experienced an increase in stock price continuously from 2010-2014 which was quite high. At the company PT. Bank Danamon Indonesia, Tbk. (BDMN.JK) in 2010-2012 experienced a decline only in 2011, while in 2012-2014 experienced a decline only in 2013. At the company Bank Woori Saudara Indonesia (SDRA.JK) in 2010-2014 experienced increase in stock price in 2011, while in the following year has decreased. The Bank Victoria International Tbk (BVIC.JK) company in 2010-2012 experienced a decline only in 2011, while in 2012-2014 subsequently declined. The Bank Rakyat Indonesia (Persero) (BBRI.JK) com- pany in 2011 experienced a decline, while the following year experienced a gradual increase in stock price. At the Bank OCBC NISP Tbk company. (NISP.JK) in 2010-2012 which experienced a decline only in 2011, while in 2012-2014 it decreased only in 2013. Whereas in the company Bank Maybank Indonesia Tbk. (BNII.JK) only experienced an increase in 2010, the following year experienced a very drastic decline. The factors affecting stock price of companies listed in stock exchange market have been studied by many researches. Some researches have identified the factors such as fundamental fac- tors, external factors, and recently the bank’s health factors (Al-Qaisi, Tahtamouni, and Al-Qudah, 2016; Leonardo and Budiana, 2015; Setiawan, 2011). Based on the problem and previous re- search , the purpose of the study is to prove the influence of the bank's health level as measured by the risk profile and Good Corporate Governance (GCG) on the stock price of a banking companies registered on the Indonesia Stock Exchange. This research is different from previous research, be- cause this research only focuses on Risk Profile and Good Corporate Governance. In this research, Risk Profile assesses inherent risk, namely credit risk using the NPL ratio, market risk using the IRR ratio, and liquidity risk using the LDR ratio. Whereas in Good Corporate Governance it is only done on an internal mechanism, that is carried out by the board of directors, board of com- missioners, audit committee and ownership structure (managerial ownership and institutional ownership). According to Fahmi (2014: 270), shares are 1) Proof of ownership of capital or fund own- ership in a company, 2) A Paper that clearly record nominal value, company name and followed by rights and obligations explained to each holder, 3) Inventory that is ready for sale. Fahmi (2014: 234), discussed that in the capital market there are two types of shares that are most com- 58 Journal of Accounting and Strategic Finance Vol.1 No.01 June 2018, pp. 57-68 monly known by the public, namely common stock and preference stock. According to Hartono (2010: 8), stock price that occur on the stock market at a given time are determined by market par- ticipants and by the demand and supply of the shares concerned in the capital market. In addition, Fahmi (2012. 87) also revealed that the stock price of a company is determined by several factors, namely the condition of Micro and Macroeconomics, company policy in deciding to expand (business expansion) such as opening a branch office, Sub-Branch whether opened domestically or abroad, sudden change of directors, company directors or commissioners involved in criminal acts and cases that have entered the court, the company's performance that continues to decline, systematic risk a form of total risk that occurs and has causes the company to be involved, and the effects of market psychology that have been able to suppress the technical conditions of buying and selling shares. According to Widoatmodjo (2012: 46), stock price can be divided into three, namely first, the nominal price, is the price stated in the stock certificate set by the issuer to assess each share issued. Second, the initial price is the price recognized when the share price is listed on the stock exchange. Third, market prices are selling prices from one investor to another.
Load more

Recommended publications
  • Right Place, Right Time, Right Company
    Right Place, Right Time, Right Company PT Lippo Karawaci Tbk 9M 2017 Indonesia’s Largest and Most Integrated Property Group Leaders in Integrated Developments, Hospitals, Retail Malls, Hotels and Asset Management CONTENTS CORPORATE STRUCTURE 01 LARGEST & MOST INTEGRATED PROPERTY COMPANY 02 FOUR BUSINESS DIVISIONS 03 MOST RECENT FINANCIAL RESULTS 04 - 05 DIVERSIFIED LANDBANK & PROJECTS 06 - 07 MOST INTEGRATED BUSINESS MODEL 08 HIGHLY EXPERIENCED & PROFESSIONAL MANAGEMENT 09 GROWTH STRATEGIES 10 OUR PORTFOLIO 11 - 37 FINANCIAL PERFORMANCE 38 - 42 APPENDICES 43 - 63 CORPORATE STRUCTURE OTHER MAJORITY SHAREHOLDERS LIPPO RELATED COMPANIES > 5% PUBLIC < 5% 32.00% 31.64%. 36.36 % As of 30 Sep 2017 No of Floating Shares : 22,771,585,119 Code : LPKR.JK ; LPKR IJ 62,1% 54,4% 62,7% 100% PT SILOAM INTERNATIONAL PT LIPPO CIKARANG TBK PT GOWA MAKASSAR TOURISM PT BOWSPRIT ASSET HOSPITALS TBK DEVELOPMENT TBK MANAGEMENT 01 LARGEST & MOST INTEGRATED PROPERTY COMPANY Largest listed property Company by Revenue and Total Assets. Revenue and Total Assets as per 9M 2017: USD 555 million and USD 3.9 billion, respectively. Fastest growing Indonesian real estate group market cap grew by more than 5x to USD 1.24 billion1 since the merger of eight property related companies in 2004. Market leaders in mixed use integrated developments, hospitals, and retail malls. Integrated business model with ability to recycle capital, and largest diversified landbank throughout Indonesia. Only Property Company rated by three rating agencies (B by Standard & Poor’s2 , BB- by Fitch3, B1 by Moody’s 4) Included in major Indonesia Stock Exchange Indices: LQ45,IDX30, Kompas-100, Jakarta Islamic Index, ISSI, and Investor-33.
    [Show full text]
  • IOSCO Members Ordinary Members (129)
    IOSCO Members Ordinary Members (129) AGENCY COUNTRY Albanian Financial Supervisory Authority ALBANIA Alberta Securities Commission ALBERTA, CANADA Commission d’Organisation et de Surveillance des Opérations de Bourse ALGERIA Autoritat Financera Andorrana ANDORRA, PRINCIPALITY OF Comissão do Mercado de Capitais ANGOLA Comisión Nacional de Valores* ARGENTINA Central Bank of Armenia ARMENIA Australian Securities and Investments Commission* AUSTRALIA Financial Market Authority AUSTRIA Securities Commission of The Bahamas* BAHAMAS, THE Central Bank of Bahrain BAHRAIN, KINGDOM OF Bangladesh Securities and Exchange Commission BANGLADESH Financial Services Commission BARBADOS Financial Services and Markets Authority* BELGIUM Bermuda Monetary Authority BERMUDA Autoridad de Supervisión del Sistema Financiero BOLIVIA Securities Commission of the Federation of Bosnia and Herzegovina BOSNIA AND HERZEGOVINA, FEDERATION OF Comissão de Valores Mobiliários* BRAZIL British Columbia Securities Commission CANADA British Virgin Islands Financial Services Commission BRITISH VIRGIN ISLANDS Autoriti Monetari Brunei Darussalam BRUNEI Financial Supervision Commission BULGARIA Auditoria Geral do Mercado de Valores Mobiliários, Banco Central of Cabo Verde CABO VERDE Cayman Islands Monetary Authority CAYMAN ISLANDS Commission de Surveillance du Marché Financier de l’Afrique Centrale CENTRAL AFRICA Comisión para el Mercado Financiero (Financial Market Commission) CHILE China Securities Regulatory Commission* CHINA Financial Supervisory Commission CHINESE TAIPEI Superintendencia
    [Show full text]
  • Stock Investment Analysis: Case in Indonesia Stock Exchange (Idx)
    International Journal of Business and Management Review Vol.3, No.1, pp.54-63, January 2014 Published by European Centre for Research Training and Development UK (www.eajournals.org) STOCK INVESTMENT ANALYSIS: CASE IN INDONESIA STOCK EXCHANGE (IDX) Moh Benny Alexandri Universitas Padjadjaran Nita Jelita ABSTRACT: This study show the growing interest of investors to invest in Indonesia's capital market as emerging market. Before investing, it was very important for investor to consider the risk and rate of return factors. One method used to analyze the relationship between return and risk in stock investment is the Capital Asset Pricing Model (CAPM). This study aims to analyze the CAPM method to describe the risk and stock returns, and investment options to determine the best stock in the pharmaceutical company that listed in the Indonesian Stock Exchange (IDX) period 1/1/2009-31/12/2012.The study used 8 samples of pharmaceutical companies listed in the Indonesian Stock Exchange (IDX) period 1/1/2009-31/12/2012. The sample selection was purposive sampling technique with some criteria of research necessity. Results showed there were 5 pharmaceutical companies listed in Indonesian Stock Exchange (IDX) has a beta greater than 1 (β> 1) with the highest expected rate of return, and 3 pharmaceutical company has a beta less than 1 (β <1) with the lowest expected rate of return . Furthermore, the results of the analysis of stock investment decisions that used the Capital Asset Pricing Model (CAPM) were 7 companies from 8 companies were classified as undervalued stocks, it was recommended to buy the stock, and 1 company classified as overvalued, it was recommended to sell the stock.
    [Show full text]
  • The SIBR-Thammasat 2013 Conference Program
    PROGRAM (Finalized Version) DAY 1 (June 6, 2013) DAY 2 (June 7, 2013) DAY 3 (June 8, 2013) Registration 8:30- Registration 9:00-10:35 Sessions A1, B1 9:00-10:35 Sessions A2, B2 9:00-10:35 Sessions A3, B3, J3 16:00 (Day 1-3) 1-3) (Day 16:00 10:35-10:50 Tea break 10:35-10:50 Tea break 10:35-10:50 Tea break 10:50-12:00 Keynote Speech* 10:50-12:15 Sessions C2, D2, K2 10:50-12:15 Sessions C3, D3, K3 12:00-13:25 Lunch (Grand Panorama) 12:15-13:25 Lunch (Grand Panorama) 12:15-13:25 Lunch (Grand Panorama) 13:25-15:00 Sessions E1, F1, M1 13:25-15:00 Sessions E2, F2, M2 13:25-15:00 Sessions E3, F3 15:00-15:15 Tea break 15:00-15:15 Tea break 15:00-15:15 Closing & Tea gathering 15:15-16:40 Sessions G1, H1, N1 15:15-16:40 Sessions G2, H2, N2 * “Interdisciplinary: the Evolution of Research and Public Policy Planning”, by Professor Dr. Sakon Varanyuwatana, Faculty of Economics, Thammasat University (Venue: Panorama I) Session A1: ECONOMIC, SOCIAL & CULTURAL DEVELOPMENT (venue: Panorama I) Chair: Rob Alex Burnett (Webster University Thailand) At the Nexus of Economic Independence and Social Cohesion: A Conjectural Analysis of Impact of Low Input Projects to Family Life in Zimbabwe (b13-090) Speaker: Sevias Guvuriro (University of the Free State, South Africa) Growth and Business Development: Promoting New Talent within SME Fashion Design and Adding Value to the Economy in Bangladesh: Characteristics, Opportunities and Barriers to Growth (b13-091) Speaker: Lynne Hammond (London College of Fashion) Gender, Social Class and Peer Group Influences on Teenagers’
    [Show full text]
  • Whistleblowing System
    Information Corporate Corporate Sosial Cross Cross Financial Technology Governance Responsibility reference POJK reference ACGS Statements Socialization of Gratification Policy Socialization related to gratification control was carried out continuously to all levels of the organization to increase awareness where in its implementation UPG coordinated with Head of DCOR and Risk Business Control -AMLO. The socialization was carried out directly to the Working Units at Headquarters, Regional Offices, Branch Offices and through regular ODP/SDP classes. Throughout the year of 2018, face-to-face socialization was conducted to approximately 1,810 Bank Mandiri employees. Other media used in disseminating gratification control policies are through the installation of Gratuity Control Posters at the Regional Offices and Headquarters, sending Email Blasts, Screen Savers, Mandiri Magazine, making gratification display cabinets and urge all Bank Mandiri partners/fellows not to provide gratification related to religious celebrations and new year through national newspaper media. Gratification Reports In 2018 Bank Mandiri employees who receive/reject gratuities must report their receipt/rejection to the UPG via e-mail facilities no later than 5 (five) working days after receipt/rejection by filling in the reporting form accompanied by adequate supporting documents. After receiving the report, UPG will review and classify the report on gratuities that are the authority of Bank Mandiri or the authority of the KPK. Throughout the year of 2018, numbers of reports on receipt/rejection of gratuities received by UPG were 129 reports. The receipt of reported gratuities includes in the form of bribery gratuities, perishable food/goods, goods in the framework of service, honorarium in the context of service and marriage.
    [Show full text]
  • The Investment Case for Indonesia the Investment Case for Indonesia
    THE INVESTMENT CASE FOR INDONESIA THE INVESTMENT CASE FOR INDONESIA Figure 5 Stock Market Profi le 2003 2004 2005 2006 2007 Listed companies 333 331 336 344 383 Top priority since Indonesia’s economy has always operated Long perspective Listed shares (bil.) 829.3 656.4 713.0 924.5 1,128.2 with a heavy state infl uence. One of Indonesia’s top priorities in recent years Volume of net share 9,524 23,946 27,938 25,451 38,170 As solid as Indonesia’s recovery has been, it may be has been to increase foreign direct investment as a purchases by foreign To that end, the government has begun to reduce slowed if the current crisis produces a prolonged investors (mil.) means of promoting its recovery and development. its long-standing subsidies of key basic goods, slump in global growth. Moreover, the country con- Market capitalization 54.5 72.7 81.4 138.4 211.1 Many sectors of its economy have been open to ($ bil.) such as fuel and rice, and is overhauling the vast tinues to face a long list of challenges in restructur- foreign investment for decades, and these infl ows Source: Indonesia Stock Exchange state-owned enterprise sector—which at its zenith ing its economy and raising its living standards, and have played a key role in recapitalizing its banking was made up of 200-plus companies. The goal is to it remains to be seen if Indonesia has the fortitude system—which is now 40% foreign-owned.3 But in reduce that number to 50 by consolidating, selling to sustain the policies that will enable it to achieve the post-crisis era, Indonesia’s investment needs are or privatizing these enterprises.
    [Show full text]
  • IOSCO Members Ordinary Members (126)
    IOSCO Members Ordinary Members (126) AGENCY COUNTRY Albanian Financial Supervisory Authority ALBANIA Alberta Securities Commission CANADA Commission d’Organisation et de Surveillance des Opérations de Bourse ALGERIA Institut Nacional Andorra de Finances ANDORRA, PRINCIPALITY OF Comisión Nacional de Valores ARGENTINA Central Bank of Armenia ARMENIA Australian Securities and Investments Commission* AUSTRALIA Financial Market Authority AUSTRIA Securities Commission of The Bahamas BAHAMAS, THE Central Bank of Bahrain BAHRAIN, KINGDOM OF Bangladesh Securities and Exchange Commission BANGLADESH Financial Services Commission BARBADOS Financial Services and Markets Authority* BELGIUM Bermuda Monetary Authority BERMUDA Autoridad de Supervisión del Sistema Financiero BOLIVIA Securities Commission of the Federation of Bosnia and Herzegovina BOSNIA AND HERZEGOVINA, FEDERATION OF Comissão de Valores Mobiliários* BRAZIL British Columbia Securities Commission CANADA British Virgin Islands Financial Services Commission BRITISH VIRGIN ISLANDS Autoriti Monetari Brunei Darussalam BRUNEI Financial Supervision Commission BULGARIA Cayman Islands Monetary Authority CAYMAN ISLANDS Commission de Surveillance du Marché Financier de l’Afrique Centrale CENTRAL AFRICA Superintendencia de Valores y Seguros CHILE China Securities Regulatory Commission* CHINA Financial Supervisory Commission CHINESE TAIPEI Superintendencia Financiera de Colombia COLOMBIA Superintendencia General de Valores COSTA RICA Croatian Financial Services Supervisory Agency CROATIA Cyprus Securities
    [Show full text]
  • Role of Dividend of Power to Buy Shares in Companies in Indonesia Stock Exchange
    digitales archiv ZBW – Leibniz-Informationszentrum Wirtschaft ZBW – Leibniz Information Centre for Economics Muda, Iskandar Article Role of dividend of power to buy shares in companies in Indonesia stock exchange Provided in Cooperation with: Dimitrie Cantemir Christian University, Bucharest This Version is available at: http://hdl.handle.net/11159/765 Kontakt/Contact ZBW – Leibniz-Informationszentrum Wirtschaft/Leibniz Information Centre for Economics Düsternbrooker Weg 120 24105 Kiel (Germany) E-Mail: [email protected] https://www.zbw.eu/econis-archiv/ Standard-Nutzungsbedingungen: Terms of use: Dieses Dokument darf zu eigenen wissenschaftlichen Zwecken This document may be saved and copied for your personal und zum Privatgebrauch gespeichert und kopiert werden. Sie and scholarly purposes. You are not to copy it for public or dürfen dieses Dokument nicht für öffentliche oder kommerzielle commercial purposes, to exhibit the document in public, to Zwecke vervielfältigen, öffentlich ausstellen, aufführen, vertreiben perform, distribute or otherwise use the document in public. If oder anderweitig nutzen. Sofern für das Dokument eine Open- the document is made available under a Creative Commons Content-Lizenz verwendet wurde, so gelten abweichend von diesen Licence you may exercise further usage rights as specified in Nutzungsbedingungen die in der Lizenz gewährten Nutzungsrechte. the licence. Leibniz-Informationszentrum Wirtschaft zbw Leibniz Information Centre for Economics Academic Journal of Economic Studies Vol. 3, No. 2, June 2017, pp. 41–47 ISSN 2393-4913, ISSN On-line 2457-5836 Role of Dividend of Power to Buy Shares in Companies in Indonesia Stock Exchange Iskandar Muda Faculty Economics and Business, University of Sumatera Utara (USU), Jl. Prof. TM Hanafiah No.12 USU Campus, Medan, North Sumatera, Indonesia, E-mail: [email protected] Abstract This study aims to determine the role of the Purchasing Power Shares on manufacturing companies in Indonesia Stock Exchange Period 2014-2015.
    [Show full text]
  • MANAGING DAGO POJOK CREATIVE TOURISM VILLAGE: DOES IT REALLY CREATIVE TOURISM? Rina Suprina and Auliana Riztianti
    The 3rd International Conference on Management, Economics and Business of Universitas Mercu Buana Abstracts Proceeding Universitas Mercu Buana Published by: Universitas Mercu Buana Jl. Meruya Selatan, Kebon Jeruk, Jakarta Barat T : 021 5840 816 ( Hunting), ext: 2751 F : 021 5840 015 This publication is copyright. Subject to statutory exception and to the provisions of relevant collective licencing aggreements, no reproduction of any part my take place without the written permission of Universitas Mercu Buana. First published in 2018 Editor : Dr. Augustina Kurniasih, ME Dudi Permana Ph.D Catur Widayati, SE., MM Dr. Aty Herawati, M.Si Dr. Dewi Nusraningrum Layout : Muhammad Agung Hidayat, B.Sc., S.Kom Aditya Pratama, ST., MM Design : Safto Adi Wibowo, SE Library of Congress catalogue in Publication Data: The 3rd International Conference on Management, Economics and Business of Universitas Mercu Buana. Abstracts Proceeding published by Universitas Mercu Buana Series ISBN 978-979-99488-3-0 Distributed by: Universitas Mercu Buana Jl. Meruya Selatan, Kebon Jeruk, Jakarta Barat T : 021 5840 816 ( Hunting), ext: 2751 F : 021 5840 015 FOREWORDS Dear University Leaders, Authors, Participants, and Esteemed Readers, Travel and Tourism is an important economic activity in the most countries around the world. As well as its direct economic impact, the industry has significant indirect and induced impacts. The direct contribution of Travel and Tourism to GDP reflects the internal spending on total spending within country on Travel and Tourism by resident and non-residents for business and leisure purpose as well as government individual spending on Travel and Tourism services directly linked to visitors, such as cultural or recreational.
    [Show full text]
  • The Influence of Rupiah Exchange Rate, Interest Rate Levels, and the Composite Stock Price Index to Financial Deepening in Indonesia
    Advances in Economics, Business and Management Research, volume 103 International Conference on Tourism, Economics, Accounting, Management, and Social Science (TEAMS 19) The Influence of Rupiah Exchange Rate, Interest Rate Levels, and The Composite Stock Price Index to Financial Deepening in Indonesia Clarasiska Anasthasia Mbate Petrus E. de Rozari Nusa Cendana University Nusa Cendana University Kupang, Indonesia Kupang, Indonesia [email protected] [email protected]. ac.id Paulina Y. Amtiran Nusa Cendana University Kupang,Indonesia [email protected] Abstract—This research aims to analyze and determine the deeper. Conversely, the lower financial deepening ratio means effect of the Rupiah exchange rate, interest rate, Composite Stock that the use of money in a country' economy is shallower (Fry, Price Index on financial deepening in Indonesia. This research 1995 in reference [1]. used time series data consisting of rupiah exchange rate, interest rates, Composite stock Price Index and financial deepening in Reference [2] proves that the development of the financial quarterly during the period of 2010–2018. This research used sector will affect the economy, especially in encouraging the descriptive quantitative method. Technique of analysis in this process of economic growth. This is because the financial research is descriptive qualitative. The results of this research sector can reduce risk, mobilize savings, reduce transaction indicate that the rupiah exchange rate, interest rate and costs and information, and encourage specialization. Composite Stock Price Index have effect to financial deepening in Indonesia. The factors that influence financial deepening according to reference [3] consist of three factors, namely the effect of the Keywords— Composite Stock Price Index; Exchange Rate exchange rate on financial deepening, the effect of national Financial Deepening; Interest Rate income on financial deepening and the influence of the interest rate on financial deepening.
    [Show full text]
  • Completion Report Indonesia: Financial Market Development And
    Completion Report Project Number: 44252-013 Loan Number: 2895 June 2017 Indonesia: Financial Market Development and Integration Program This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011. CURRENCY EQUIVALENTS Currency Unit – rupiah (Rp) At Appraisal At Program Completion (30 May 2012) (31 December 2012) Rp1.00 = $0.0001057 $0.0001035 $1.00 = Rp9,9458 Rp9,658 ABBREVIATIONS ADB – Asian Development Bank ASEAN – Association of Southeast Asian Nations FPO – Fiscal Policy Office GDP – gross domestic product GMRA – Global Master Repurchase Agreement IT – information technology OJK – Otoritas Jasa Keuangan (Integrated Financial Services Authority) TA – technical assistance GLOSSARY sukuk – a financial document or certificate that represents the value of an asset evidencing an undivided pro rata ownership of an underlying asset takaful – form of Islamic insurance based on the principle of mutual assistance, which provides mutual protection of assets and property and offers joint risk sharing in the event of loss incurred by one of its members NOTE In this report, "$" refers to United States dollars. Vice -President S. Groff, Operations 2 Dir ector General J. Nugent, Southeast Asia Department (SERD) Director K. Bird, Public Management, Financial Sector, and Trade Division (SERD) Team leader K. Hattel, Financial Sector Specialist, SERD Team members J. Dajay-Java, Operations Assistant, SERD L. Jovellanos, Senior Economics Officer, SERD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
    [Show full text]
  • The Indonesia Stock Exchange - IPO Overview 1
    The Indonesia Stock Exchange - IPO Overview 1 The capital market in Indonesia existed long before the Independence of Indonesia. The first stock exchange (“ Exchange ”) in Indonesia was established in 1912 in Batavia (now Jakarta) during the Dutch colonial era. At that time, the Exchange was established for the interest of the Dutch East Indies (VOC). During that era, the capital market grew gradually, and even became inactive for periods of time due to various conditions, such as during World Wars I and II, and during the transition of power from the Dutch government to the Indonesian government. The Indonesian government reactivated its capital market in 1977, and with the support of incentives and regulations issued by the government, it has grown rapidly since. From 1977 to 1989, there were two Exchanges in Indonesia, namely (i) Jakarta Stock Exchange and (ii) Surabaya Stock Exchange. Coinciding with the 30th Anniversary of the Capital Market Re-Activation in Indonesia, Surabaya Stock Exchange was merged into Jakarta Stock Exchange. This merger created a new entity in Indonesia’s capital market, namely Indonesia Stock Exchange (“ IDX ”). In the extraordinary general meeting of shareholders held on 30 October 2007, all shareholders of both Exchanges agreed to the merger planning and the formation of IDX. Thus, effective from 1 December 2007, IDX began acting as a single bourse in Indonesia that facilitates equities, fixed incomes, and derivative instruments trading. The existence of this single bourse strengthens the Indonesian capital market and attracts more people to invest in Indonesia. IDX contains two boards for listings: (i) Main Board; and (ii) Development Board (with the Main Board, each a “ Board ”).
    [Show full text]