The impact of macroeconomic variable movements on stock price index performance in consumer goods industry sector companies: Evidence from Indonesia

Elegi Zuhri,Suskim Riantani Suskim Riantani

doi:10.47577/tssj.v14i1.2172

Abstract

This research essentially aims to examine the extent to which macroeconomic variables (including inflation, exchange rate, and interest rate) have a significant influence on stock price index and the level of significance for that influence. The researchers focused more on consumer goods industry companies that are listed on the Indonesian Stock Exchange (IDX) within 2015 until 2019, with consideration for the stock price of consumer goods companies listed on the Indonesia Stock Exchange (IDX) as claimed to be the most defensive stock. This study finds that inflation, exchange rate, and interest rate, as composite variables, have a significant influence on stock price index. A partial test revealed that inflation, and exchange rate have negative significant influence on stock price index, while interest rate is found to be nonsignificant.

Highlights

The consumer goods industry sector is the sector with the second largest market capitalization value in the Indonesian capital market at 16.12%, while the first largest market capitalization value comes from the financial sector of 34.96%
Amidst pressures in the consumer goods industry sector is considered able to show a stable performance in the face of several macroeconomic issues affecting the Indonesian capital market such as the high inflation rate that reached 8.36% in 2014, rupiah exchange rate volatility influenced by political issues, and high interest rates that reached 7.75% in 2014
Research on, The impact of macroeconomic variable movements on stock price index performance in consumer goods industry sector companies, with sample data of 20 companies listed on the main board in the period 2015 to 2019, was created to answer the phenomenon that exists in the world of capital markets in Indonesia

Summary

Introduction

The consumer goods industry sector is the sector with the second largest market capitalization value in the Indonesian capital market at 16.12%, while the first largest market capitalization value comes from the financial sector of 34.96%. Based on IDX Stock Index report data (2019), which is displayed, with its high market capitalization value, the share price index of the consumer goods industry sector has decreased performance over the last 5 years by -5.75%. Throughout 2015 to 2019, the stock price index performance of the consumer goods industry sector fell to far behind the basic industry and chemicals sector with growth of 79.91% and a market capitalization value of only 10.67%. The decline in performance seen from the negative value of the stock price index of the consumer goods industry sector is an unexpected phenomenon by Indonesian capital market investors.

Objectives

Methods

Findings

Discussion

Conclusion