Abstract
This research aims to investigate effect of selected macroeconomic variables, i.e., USD/IDR exchange rate, interest rate, and world oil price to indonesia composite index at the indonesia stock exchange (IDX). This paper examine the direct effect of selected macroecomonic variable on Indonesia Composite Index. The study used time series data from the 2012-2017. By using an regression technique analysis, the result from showed that simultaneously the exchange rate, interest rate, and world oil price have a significant effect on Indonesia Composite Index. Partially, only the exchange rate has a significant effect on Indonesia Composite Index, interest rate and world oil price have no significant effect on Indonesia Composite Iindex. The amount of influece caused by the three variables is 58% and the rest is explained by other variables.
Highlights
The capital market is an important factor in economy in a particular in Indonesia
Only the exchange rate has a significant effect on Indonesia Composite Index, interest rate and world oil price have no significant effect on Indonesia Composite Iindex
The conclusion of this research are as follows : (1) Based on the research results that the variable exchange rate has a significant positive influence on Jakarta Composite Index (JCI), this means the increase in the exchange rate will push up the JCI in Indonesia
Summary
The capital market is an important factor in economy in a particular in Indonesia. Capital market have to important functions in the economy, namely to be a means for companies fhat want to have additional sources of capital for operational continuity and other activities that provide profits to companies by expanding, developing bussiness or as a place for investors who have excess funds and want to invest in the form of instruments that are in the capital market in order to get more profits than just saving in the bank (Ardian, 2010).The Capital Market is a place where the activities of various types of securities are traded, where his meeting places parties who need funding and the excess of fund. Capital market have to important functions in the economy, namely to be a means for companies fhat want to have additional sources of capital for operational continuity and other activities that provide profits to companies by expanding, developing bussiness or as a place for investors who have excess funds and want to invest in the form of instruments that are in the capital market in order to get more profits than just saving in the bank (Ardian, 2010). Capital Market is a place where various parties, especially companies sell stocks and bonds with the purpose of the selling results will be used as an additional fund or to strengthen the company (Fahmi, 2011). Composite index is an index showing the general movement of stock prices listed on the stock exchange is the reference of the development of activities in the capital market. Composite index can be used to assess the general market situation or measure if the stock price has increased or decreased (Anoraga & Pakarti, 2001) Composite Index is a stock price index figures already compiled and calculated by producing trend, where the index number is a number that are processed in such a way that can be used to compare events that can be changes in stock prices over time (Jogiyanto, 2013)
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