Abstract
This study aims to analyze fundamental factors and technical factors that influence stock returns and their implications for company value in Indonesia Stock Exchange, sub sector plastic and packaging. Fundamental factors of financial ratios are return on assets (ROA), current ratio (CR), debt to equity ratio (DER), and price earnings ratio (PER) while the technical factors are the rupiah exchange rate using changes in value exchange rupiah (RP) against United States dollar (USD). This study used annual data for the observation period from 2010 to 2017. The sampling method used was Purposive Sampling, as the result 8 companies (64 samples) met the criteria and processed using E-views 9 program. The analytical method used in this study is panel data and multiple linear regression as a method of analysis and measurement of direct effect and indirect effect analysis. The results showed that ROA, CR, DER, and PER are having positive and insignificant influence on stock returns however the exchange rate has negative and significant influence on stock returns. ROA, DER, and PER are having positive and insignificant influence on company value however CR and exchange rates have a negative and insignificant effect on company value. Stock returns has positive and significant influence on company value. The examination of indirect effects showed stock return could be considered as an intervening variable to measure the influence of fundamental factors and technical factors to company value.
Highlights
The downstream plastic industry is one of the strategic industries given the widespread use of plastic products in people's lives
This study aimed to examine the influence of internal factors and external factors on stock return and its implication in company value
This study is to examine the effect of return on assets (ROA), current ratio (CR), Debt to equity ratio (DER), Price earnings ratio (PER) and exchange rate by statistical testing in order to find out the five variables on stock return and their impact on company value for the period 2010-2017
Summary
The downstream plastic industry is one of the strategic industries given the widespread use of plastic products in people's lives. Based on the results of mapping of plastic goods products and markets in Indonesia, the downstream plastic industry in Indonesia is estimated to consist of 925 registered companies that produce various types of products with employment of more than 132 thousand people, with a level of need for exports and imports of plastic products reaching 1, 6 million tons in 2017, with a value of USD 4.1 billion (Directorate of Downstream Chemical Industry, Indonesian Ministry of Industry, 2018). Increased production of plastic raw materials (upstream petrochemicals) such as olefins is being sought. The imported plastic raw materials reached US $ 17.6 billion in 2015. Based on BPS records, in 2012, the total import value of olefin products from two polyolefin products for plastic raw materials, namely polypropylene (PP) resin and PE resin reached US $ 3.65 billion. Imports of polypropylene raw materials reached 484,000 tons out of a total requirement of 976,000 tons, naphtha imports amounted to 1.6 million tons and imports of condensate at 33 million barrels. The capital invested by investors in the plantation industry is very large but the stock returns obtained are very fluctuating so it needs to be analyzed how much influence the production volume and CPO prices have on profitability and the impact on stock returns, especially capital gains, according to the purpose of this study
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