The Role of the Capital Market on the Economy

Abstract

The role of the capital market as a source of corporate funding which has implications for the country's economy is not just an alternative but has become a major source of funding. Funds offered in the capital market through several corporate corporate actions such as initial public offering (IPO), listing of new shares (rights issue) and bond issuance annually are considered far more efficient than funding obtained by the company from bank loans. Especially when the inflation trend is experiencing an increase which indirectly affects the interest rates of bank loans. The number of companies that registered IPOs, rights issues or bonds as well as funds collected from the three corporate actions recorded significant results each year. Even if compared to fluctuations, one of which is influenced by the domestic and foreign economies, every year, but this does not dampen the interest of companies to continue to obtain funding in the capital market.