Macroeconomic effect on stock price: Evidence from Indonesia

Andung Luwihono,Budi Prasetyo,Zainal Mahfud,Nawang Kalbuana,Taryana Taryana,Riyanto Saputro,Rusdiyanto Rusdiyanto,Pribadi Asih,Yayuk Suprihartini,Darmawanta Sembiring,Syahrir Rasyid,Benny Suherman

doi:10.5267/j.ac.2021.2.019

Abstract

Investment decision making by Engineering Managers needs to take into account microeconomic and macroeconomic factors in a country. The role of Engineering Managers in making decisions is crucial and very important. Technical Managers need to consider macro-economic effects such as the US dollar exchange rate against the rupiah, the interest rate set by Bank Indonesia, inflation, especially during the preparation of the Budget Plan (RAB). This research is to analyze the macroeconomic effect on stock prices, to prove the hypothesis, a quantitative approach is used. Macroeconomics are assessed through the US dollar exchange rate, and financial statements data of banking companies.

Highlights

IntroductionTechnical Managers need to consider macro-economic effects such as the US dollar exchange rate against the rupiah, the interest rate set by Bank Indonesia, inflation, especially during the preparation of the Budget Plan (RAB)
Investment decision making by Engineering Managers needs to take into account microeconomic and macroeconomic factors in a country
Technical Managers need to consider macro-economic effects such as the US dollar exchange rate against the rupiah, the interest rate set by Bank Indonesia, inflation, especially during the preparation of the Budget Plan (RAB)

Summary

Introduction

Technical Managers need to consider macro-economic effects such as the US dollar exchange rate against the rupiah, the interest rate set by Bank Indonesia, inflation, especially during the preparation of the Budget Plan (RAB). Banks are intermediaries who truly need community involvement in their function, banking products and services are used, the bank demands that the public raise money for banking purposes. Since the bank's business activity involves fundraising and channeling, the financial institution must maintain public trust, in order to deposit its resources with the bank, and it needs to maintain its health condition by applying the Principle of Caution. Regulatory capital models consider the effect of liquidity risk on stock price (Alfonsi et al, 2020; Asmah et al, 2020; Cai et al, 2020; Gajek & Rudź, 2020; Kupiec, 2020; Rehfeldt et al, 2020; Tran et al, 2020), The higher the capital ratio J. Wang et al, 2020), so it will impact the stock Price The second thought argues that higher capital ratios reduce financial fragility so that it increases financial resilience (Bezemer et al, 2020; Escobar et al, 2020; Humpe & McMillan, 2020; Kind et al, 2020; Kuhl et al, 2020; Pennerstorfer et al, 2020; Pollard et al, 2020)

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Discussion

Conclusion