The Influence of Economic Variables on Stock Prices of Telecommunications Companies

Abstract

The general background fluctuation of stock prices is a critical concern for investors, particularly in dynamic economic environments where various indicators can significantly impact financial performance. The specific background of this study focuses on the telecommunications sector, which has been increasingly influenced by economic variables such as the Inflation Rate, SBI Interest Rate, Earnings Per Share, Rupiah Exchange Rate, and Company Fundamentals. Despite existing research, there is a knowledge gap regarding how these factors collectively influence stock prices in publicly listed telecommunications companies. This study aims to investigate the effects of these economic variables on stock prices from 2020 to 2023, utilizing a quantitative approach with secondary data obtained from annual financial reports of 16 companies. The results demonstrate that all examined variables—Inflation Rate, SBI Interest Rate, Earnings Per Share, Rupiah Exchange Rate, and Company Fundamentals—significantly affect stock prices. The novelty of this research lies in its comprehensive analysis of the interplay between these economic indicators specifically within the telecommunications sector. The implications of these findings suggest that investors and policymakers should consider these economic factors when making investment decisions, thereby enhancing their financial strategies and contributing to a more robust understanding of stock market dynamics in the telecommunications industry. Highlights: All examined economic variables significantly affect stock prices. The study analyzes data from 16 publicly listed telecommunications companies. Findings enhance investment strategies and understanding of market dynamics. Keywords: Inflation, Interest Rate, Earnings Per Share, Exchange Rate, Stock Price