The impact of inflation, exchange rate, financial performance, market return, and COVID-19 instances on stock returns of pharmaceutical companies listed on Indonesia stock exchange 2017-2022
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Institusion
Sekolah Tinggi Manajemen Ipmi
Author
Widjaja, Weki
Subject
H Social Sciences (General)
Datestamp
2024-01-08 02:45:03
Abstract :
Stocks return is one of the most essential factors for investors to do investment. Unfortunately, some public companies in Indonesia's pharmaceutical industry experienced negative returns while some had positive returns. This study aimed to examine the impact of macroeconomic factors, financial performance, market return, and COVID-19 instances on the stocks return of pharmaceutical companies listed in Indonesia stock exchange 2017-2022. Macroeconomic factors were represented by inflation and exchange rate, financial performance were represented by return on equity (ROE), current ratio (CR), total assets turn-over (TATO), and debt to equity ratio (DER). This study used stocks return as dependent variable and inflation, exchange rate ROE, CR, TATO, DER, market return (MR), and COVID-19 instances as independent variables. Sample used in this study are nine (9) companies listed on Indonesia stock exchange with the period of 2017Q1-2022Q3. Some of them are state owned companies (SOE) while the others were non-SOE companies. Statistical t-test were used to investigate the effects of independent variables on dependent variable. The result of the test were : 1) inflation had negative effect on stock return, 2)exchange rate had no effect on stocks return, 3) ROE had no effect on stocks return, 4) CR had positive effect on stock return, 5) TATO had no effect on stock return, 6) DER had no effect on stock return, 7) MR had positive effect on stock return, and 8) COVID-19 instances has negative effect on stock return. This study showed that efficient market hypothesis, capital asset pricing model, and signaling theory were still relevant today as it was before. Managers should manage working capital properly, investors should properly analyze inflation, market return, COVID-19 instances, and CR and government should appropriately handle inflation and prevent more infection of COVID-19.
Stocks return is one of the most essential factors for investors to do investment. Unfortunately, some public companies in Indonesia's pharmaceutical industry experienced negative returns while some had positive returns. This study aimed to examine the impact of macroeconomic factors, financial performance, market return, and COVID-19 instances on the stocks return of pharmaceutical companies listed in Indonesia stock exchange 2017-2022. Macroeconomic factors were represented by inflation and exchange rate, financial performance were represented by return on equity (ROE), current ratio (CR), total assets turn-over (TATO), and debt to equity ratio (DER). This study used stocks return as dependent variable and inflation, exchange rate ROE, CR, TATO, DER, market return (MR), and COVID-19 instances as independent variables. Sample used in this study are nine (9) companies listed on Indonesia stock exchange with the period of 2017Q1-2022Q3. Some of them are state owned companies (SOE) while the others were non-SOE companies. Statistical t-test were used to investigate the effects of independent variables on dependent variable. The result of the test were : 1) inflation had negative effect on stock return, 2)exchange rate had no effect on stocks return, 3) ROE had no effect on stocks return, 4) CR had positive effect on stock return, 5) TATO had no effect on stock return, 6) DER had no effect on stock return, 7) MR had positive effect on stock return, and 8) COVID-19 instances has negative effect on stock return. This study showed that efficient market hypothesis, capital asset pricing model, and signaling theory were still relevant today as it was before. Managers should manage working capital properly, investors should properly analyze inflation, market return, COVID-19 instances, and CR and government should appropriately handle inflation and prevent more infection of COVID-19.
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