Stock Price Increases Research Articles

Financial Performance Evaluation of PT. Telekomunikasi Indonesia, Tbk. and PT. Indosat, Tbk.

Two telecommunications companies in Indonesia have their names listed in Indonesian Stock Exchange (IDX) namely, PT. Indosat, Tbk. (ISAT) and PT Telekomunikasi Indonesia (TLKM) have enlivened the telecommunication industry. This study aims to evaluate the performance of two telecommunications companies in Indonesia by assessing, comparing and analyzing fundamentally, technically and news or company policies occurred in the field during 2017 - May 2018. In Fundamental Analysis, the two companies are categorized as companies that have a good financial condition. However, in the second semester of 2017, telecommunication companies experienced a significant decline in market value, which was contrary to the fundamental analysis. If viewed from a technical perspective, this telecommunication service company has good prospects for the future. Company policy or news is also one of the determining factors for the increase or decrease in stock prices. The overall results of the study concluded that TLKM shares have a fundamental, and technical, that is better than ISAT, while news and company policies can be investors' supporting data in determining stock purchases.

Does idiosyncratic risk matter? Evidence from mergers and acquisitions

PurposeThis paper aims to investigate whether idiosyncratic volatility is a priced risk factor in the Australian stock market.Design/methodology/approachThe authors use the change in idiosyncratic volatility around acquisition announcements and the related stock price revaluation to test whether the idiosyncratic risk is priced. If the idiosyncratic risk is priced, increases (decreases) in idiosyncratic volatility should be associated with decreases (increases) in the acquirer’s stock price, as the latter’s future cash flows are discounted at a higher (lower) rate. The sample consists of 2,656 completed acquisitions by Australian listed firms over the period January 1990 to October 2014 for which deal value represents more than 5 per cent of the acquirer’s market value.FindingsIncreases (decreases) in idiosyncratic risk are associated with significant decreases (increases) in firm value. This negative relationship is robust to the presence of outliers; is unaffected by the incidence of the 2007-2008 financial crisis; holds using alternative measures of idiosyncratic risk; and is more significant after excluding the resources sector. Firms with a higher idiosyncratic risk prior to the acquisition, and firms avoiding stock to pay for the acquisition, experience a more significant stock price increase in relation to a decrease in idiosyncratic risk.Research limitations/implicationsConsidering the small size of the Australian economy, investors may have less scope to mitigate idiosyncratic risk. As a consequence, idiosyncratic risk is associated with the positive excess return, contrary to what standard asset pricing theory assumes. The results support Merton’s (1987) hypothesis that investors are exposed to idiosyncratic risk due to imperfect portfolio diversification and receive compensation for bearing that risk.Practical implicationsThe pricing of idiosyncratic risk may also explain why the Australian stock market has historically offered a high equity risk premium. A practical implication would be for international investors to take advantage of the diversification constraints of local investors to capture higher risk premiums and achieve superior returns.Originality/valueWhile prior studies demonstrate that stocks with higher idiosyncratic risk are associated with higher subsequent returns, the authors show that an increase in idiosyncratic risk is associated with a decrease in stock prices using acquisition announcements as shocks to a firm’s idiosyncratic risk. In other words, the results arise from within-firm variations rather than from cross-sectional differences in stock returns.

PENGARUH PROFITABILITAS TERHADAP HARGA SAHAM PADA PERUSAHAAN LQ-45 DI BURSA EFEK INDONESIA (BEI)

The stock price is the price on the stock market at a certain time determined by market participants and is determined by the demand and supply of the shares in question in the capital market. The stock price reflects the value of the company and the effectiveness of the company. The stock price is getting higher, the higher the company's value. This research was conducted to examine the effect of profitability on stock prices in LQ-45 companies on the Indonesia Stock Exchange (IDX). The number of samples studied were twenty-seven (27) companies selected through a saturated sampling method with a four-year observation period. The data collection method used in this study is a nonparticipant observation method. Data analysis was carried out by multiple linear regression model analysis techniques. Based on the results of the analysis it was found that Return On Equity and Net Profit Margin had a significant positive effect on stock prices, while Return On Assets had no significant effect on stock prices. The increase in ROE and NPM will be followed by an increase in stock prices. 
 Keywords: Stock Price, Return On Assets , Return On Equity , Net Profit Margin

Development of an Ensemble Learning-based intelligent model for Stock Market Forecasting

The use of artificial intelligence-based models have shown that the market is predictable despite its uncertainty and unstable nature. The most important challenge of the proposed models in the stock market is the accuracy of the results and increasing the forecasting efficiency. Another challenge, which is a prerequisite for making decision and using the results of the forecast for profitability of transactions, is to forecast the trend of stock price movements in forecasting price. To overcome the mentioned challenges, this paper employs ensemble learning (EL) model using intelligence-based learners and metaheuristic optimization methods to maximize the improvement of forecasting performance. In addition, in order to consider the direction of price change in stock price forecasting, a two-stage structure is used. In the first stage, the next movement of the stock price (increase or decrease) is forecasted and its outcome is then employed to forecast the price in the second stage. In both stages, genetic algorithm (GA) and particle swarm optimization (PSO) technique are used to optimize the aggregation results of the base learners. The evaluation results of stock market dataset show that the proposed model has higher accuracy compared to other models used in the literature.

Initial bank loans, zero-leverage firms and stock market liquidity

PurposeThe purpose of this paper is to examine stock market reactions and liquidity effects following the first bank loan announcement of zero-leverage firms.Design/methodology/approachThe authors use an event studies methodology in both a univariate and multivariate framework. The authors also use regression analysis.FindingsUsing a sample of 96 zero-leverage firms listed on the FTSE 350 index over the time period of 2000–2015, the authors find evidence of a significant and permanent stock price increase as a result of the initial debt announcement. The loan announcement results in a sustained increase in trading volume and liquidity. This improvement continues to persist once the authors control for stock price and trading volume effects in both the short and long run. Furthermore, the authors examine the spread decomposition around the same period, and discover the adverse selection of the bid–ask spread is significantly related to the initial bank loan announcement.Research limitations/implicationsThe results can be attributed to the information cost/liquidity hypothesis, suggesting that investors demand a lower premium for trading stocks with more available information.Originality/valueThis is the first paper to look at multiple industries, more than one loan and information asymmetry effects.

Pengaruh Kompensasi Eksekutif terhadap Hutang : Studi pada Perusahaan yang Terdaftar di Indeks Kompas100

The aim of this research is to determine the effect of compensation received by directors (executives) on debt. Sample of this research covers 47 firms listed on Kompas100 index from 2011 until 2015 (there are 218 observations). Controlling for size of firm, firm growth, profitability, liqudity, and structure of asset, the result shows that compensation positively and significantly affects capital structure. This result implies that executives compensated highly are willing to increase stock price volatility and engage in risk taking decisions. https://doi.org/10.26905/jmdk.v7i1.3107

Does the Cost of Capital Affect Environmental Performance?

This study aims to test the influence of environmental performance in Indonesia associated with the cost of capital. This research is motivated by previous findings which stated that the environmental performance received a good response from investors as reflected in increased stock prices (Ba et al., 2013; Middleton, 2015). The development hypothesis of the research is based on the theory of stakeholder, legitimacy and the theory of signal and some previous research such as the studies that have been done (Guenster et al., 2011; Sarumpaet et al., 2017). This type of research is research explanatory, the determination of the sample using the method of purposive sampling with number of samples to qualify as many as 215 observation data derived from the annual financial reports of companies listed on the stock exchange in 2015 until 2017. The results of the statistical analysis show that there are significant negative not significant on the relationship of environmental performance with cost of capital, it can be explained that only a small fraction of investors understand the performance information of the environment, and make it as a basis for making the decision to invest.

Effects of limited attention on investors' trading behavior: Evidence from online ranking data

In this study, we provide empirical evidence that investors' limited attention affects security prices and trading volume in the short run. Using a unique dataset that was hand-collected from an Internet portal in Korea, we directly measure investor attention on individual stocks based on the rank information of the top 30 most frequently discussed stocks on the online stock message board. Investor attention is associated with significant increases in abnormal trading volume on the day that a stock is actively discussed online. Interestingly, less sophisticated individual investors continue buying more attention-grabbing stocks for a week after the active discussions of those stocks. Regarding stock return performance, whether investors are attentive to a stock significantly predicts next-day stock performance. However, the effect of attention on the stock returns is short-lived and disappears within two days, implying that the increase in stock prices is related to a behavioral bias rather than fundamental information.

Board informal hierarchy and stock price crash risk: Theory and evidence from China

ABSTRACTResearch Question/Issue: This study examines how the informal hierarchy among directors of a firm influences the risk of stock price crash. We theorize that a clear informal hierarchy among directors increases managerial coordination of activities to hide bad news, which increases the risk of future stock price crash.Research Findings/Insights: Consistent with our theoretical predictions, our findings show that the informal hierarchy among directors, measured based on the number of board appointments they have, is positively associated with the risk of future stock price crash. This association is weaker for firms with larger boards but stronger when the CEO's status is higher than that of the majority of the directors on the board. We also find evidence that information hierarchy increases the degree to which managers hide bad news.Theoretical/Academic Implications: This study advances our understanding by showing that an informal hierarchy that tacitly forms among directors on a board can significantly guide boardroom interactions. Specifically, the findings suggest that a clear informal hierarchy among directors enhances their coordination to hide bad news and thereby increases stock price crash risk. Furthermore, the results provide evidence that CEO's status and board size are important factors influencing the functioning of board informal hierarchy.Practitioner/Policy Implications: The results have important implications for researchers and policymakers. The findings show that the informal hierarchy among directors can shape managerial behavior and guide boardroom interactions. The results also suggest that improving formal governance mechanisms can enhance boardroom interactions by moderating the effects of informal hierarchy in the context of China.

Algorithmic Trading in Volatile Markets

Algorithmic trading (AT) is widely adopted by equity investors. In the current paper we investigate whether AT increases stock price volatility in turbulent periods. By exclusively focusing on the volatile days on the Australian Securities Exchange during the period of 27 October 2008 till 23 October 2009, we find a significant negative association between the level of AT activities in a particular (individual) share and the price swing of that stock. We also provide evidence that the AT’s order imbalances have smaller impact on the abnormal returns of individual stocks compared to order imbalances based on non-algorithmic trading. Overall, our findings indicate that, in turbulent market conditions, the AT improves market quality by reducing volatility and minimizing price pressure.

Testing Trade-Off Theory After U.S. Housing Bubble in 2008

In this paper, we study the relationship between firm value and debt level. As all firms try to increase the wealth of shareholders, managements like to increase stock price by adjusting their debt levels, if the debt level influences on firm value. Some theories such as MM’s irrelevant theory and the pecking order theory suggest no optimal capital structure. However, the traditional tread-off theory and MM’s 1963 theory show the existence of the optimal debt level. If firms try to maximise their values and if debt level influences on firm value, firms try to adjust their debt levels to increase value, though we do not sure exactly where the optimal capital structure is for a firm. Furthermore, we also do not sure which theory is better than others to explain firm’ financing policies; and different theory suggests different methods to reach optimal capital structure. In general, without considering any specific capital structure theory, firms try to use tax benefits or reduce their costs caused by using debt; while doing so, firms close to reach their optimal capital structure. We call this idea as a wider trade-off theory. In addition, we also presume that firms’ financial polices are acts of adapting financial market condition. Under certain circumstance, increasing or decreasing debt level brings benefit for firms if firms act in right way in accordance with financial market and economic conditions. For example, during the recession, reducing debt level is probable better for firms and vice versa. We use Tobin’s Q, PER and PBR for the proxies of firm value. First, we have compared the level of these proxies with firms’ debt level in line with different industries; and we find that Tobin’s Q and debt level have a negative association in most of our sample industries but from the results using PER and PBR we cannot find a clear relationship between them. In addition, using a liner regression estimator, we try to find a clearer relation between them; and we find a negative association between firm value and debt level with all three different firm value proxies. This result of course supports the pecking order theory. In addition, in order to test the trade-off theory, we use a quadric equation model; and our quadric equation model does not support the trade-off theory. In this paper, we use data that was collected after the U.S. financial crisis in 2008, as we worry about the influence of the world financial crisis on our sample data. It is possible that our results may be caused by data period, as most firms more likely conceives economic depression. After the U.S. housing bubble, many countries faced serious financial problems. It might be better for Korean firms to reduce debt levels for uncertain future economic environment too. This fact implies the reason why our results present the negative association between firm value and debt level. However, we may understand that under the trade-off theory firms try to reduce their debt levels to adapt new economic circumstance which is financially unstable.

Chasing investor sentiment in stock market

In this paper, we present a sentiment asset pricing model with the Chasers, who believe investor sentiment has significant impact on asset pricing and tend to chase investor sentiment, optimally inferring investor sentiment from asset price. We find that the impact of investor sentiment on asset price depends not only on the number of the Sentiment investors but also on the number of the Chasers; and the Chasers can amplify the impact of investor sentiment on asset price. If investor sentiment is optimistic, the Chasers would increase stock price; and if investor sentiment is pessimistic, the Chasers would decrease stock price. Moreover, we demonstrate that the Chasers can also increase stock price volatility. The model could offer a partial explanation to the phenomenon of overvaluation, undervaluation and excess volatility.

PRICE EARNING RATIO, DIVIDEN YIELD, DAN MARKET TO BOOK RATIO UNTUK MEMPREDIKSI RETURN ON STOCK MARKET

The existence of the capital market makes the company has tools to measure the performance and financial condition of the company. If the company's financial condition is good, then the market will respond positively through an increase in stock prices. With the rise in stock prices in the capital market, more and more investors will invest in investments. In general, investors will invest if the investment can get the maximum return with certain risks. The stock valuation in fundamental analysis is often used by market analysis to determine the capital investment for the share Price Earning Ratio (PER), Market to Ratia Book, and Dividend Yield. In this research, the data used is secondary data. Samples are taken by systematic samples. This study uses regression analysis, Stock Return as the dependent variable and PER, MTB, DY and NI as independent variables. The results of the research conducted in the regression analysis were 32.6% in 2010, 25.5% in 2011, 26.3% in 2012 and 20.8% in 2010-2012. PER variables, MTB, DY, and NI for Returning Shares. This means that PER, MTB, DY, and NI simultaneously affect Stock Return. MTB positive effect on Stock Return, while PER, DY and NI negative effect on Stock Return, and four independent variables, MTB variable is the most dominant variable effect on Stock Return

Pengaruh Struktur Modal, Profitabilitas, dan Struktur Aktiva terhadap Harga Saham

The purpose of this research is to examine the influence of profitability, capital structure, and asset structure positively to the stock price on manufacture companies which are listed in Indonesia Stock Exchange (IDX). The research samples have been selected by using purposive sampling technique to the 62 manufacture companies have been published the financial statement and active stocks which have been traded at Indonesia Stock Exchange (IDX) in 2014 – 2016 periods with the amount of 186 data which have yet to be the research sample criteria.The data analysis has been carried out by using multiple linier regressions analysis. The results of the study found out that capital structure has a positive influence on stock price means that the high capital structure influences shareholder decisions in increasing stock price. Profitability has a significant positive influence on stock price means that every increase in the profitability of a food and beverages company, it causes the stock price will increase. And asset structure have a positive influence on stock price means to indicate that every increase in asset structure of manufacture company, it causes that stock price will increase.

Profitability to the Value of Companies with the Dividend Policy as Moderate

The current development of the Indonesia Stock Exchange can not be separated by the role of investors who have invested companies that have gone public is to increase the value of the company. Companies that share capital to the capital market. The main objective has a good corporate value, also has increased the welfare of ownership or shareholders. Business development continues to progress so rapidly. Intense competition makes many companies take steps to optimize the value of the company to survive in the business world. Company value is a measure of success over the implementation of financial functions and also describes the welfare of the owners of the company. Manufacturing companies continue to experience an increase in stock prices. The increase in stock prices certainly increases the value of the company. The results showed that capital structure, profitability and moderation of dividend policy have influence to company value, with value of 45,8% research model can explain its contribution to company value

Relationship between legislation and accounting errors from the point of view of business representatives in the Czech Republic

Research background: Previous studies have demonstrated that providing relevant information to users is positively affected by higher quality of accounting standards and adhering to ethical rules and accounting principles by accounting professionals. On the other hand, there are a lot of cases when the law was broken. The most common reason for committing financial statement´s fraud include in-creasing stock prices, getting loans from bank or avoiding payment of taxes.
 Purpose of the article: The aim of this paper is to evaluate both the relationship between using of legislation and accounting errors rate in the financial statements as well as the possible using of creative accounting from the point of view of enterprises and non-profit organizations in the Czech Republic.
 Methods: Among the quantitative research methods the questionnaire was used. The questionnaires were sent out to randomly 201 selected enterprises and non-profit organization. The survey was conducted from September 2017 to the end of January 2018. The data were analyzed by means of the tools of descriptive statistics and the chi-square goodness of fit test. The research questions sought to investigate whether Czech Accounting Standards helped in all areas of accounting and reporting and avoiding of errors in financial statements, and whether the respondents encountered fraudulent procedures in compiling financial statements.
 Findings & Value added: The results indicated that using Czech Accounting Standards was perceived as a useful tool in solving all situations in areas of accounting and avoiding accounting errors. Moreover, it was proved that the volume and frequency of errors were not significant in financial statements.

Sacrificing corporate investment for stock repurchases: Are family firms different?

Recent changes to the US tax code have increased stock repurchases by US firms. Critics state and existing research provides evidence that firms forego valuable investment to repurchase stock for short-term stock price increases, benefiting managers whose compensation is closely tied to the firm's stock price. Firms for which the founding family is involved have been shown to have longer horizons regarding investment decisions. This study examines the repurchase and investing behavior of 827 firms for the period 2006 through 2015. The results provide evidence that firms decrease investment in employment and research & development concurrently with stock repurchases. Family firms, however, are less likely to repurchase shares during the period and, when they do, have a lower propensity to decrease investment in capital expenditures, employment, and research & development compared to firms that do not have a founding family presence.

THE EFFECTS OF UNCONVENTIONAL MONETARY POLICY IN JAPAN: NEW EVIDENCE FROM TIME-VARYING PARAMETER VAR ANALYSIS

This paper investigates the macroeconomic effects of unconventional monetary policies by estimating a time-varying parameter structural vector auto-regression (TVP-VAR) using Japanese monthly data beginning with the implementation of quantitative easing in 2001. The results of the empirical study can be summarized in four points. First, the impulse responses of output to a positive monetary policy shock rose during the period of quantitative easing (March 2001–July 2006) but declined after the comprehensive monetary easing began (October 2010–July 2015). Second, the impulse responses of inflation to a positive monetary policy shock became stably positive after the introduction of inflation targeting in January 2013. Third, the impulse responses of stock prices to positive monetary policy shocks rose each time an unconventional monetary policy was adopted. Finally, the recovery of the credit transmission channel might be attributed to the level of non-performing loans remaining low. The third result implies that increased stock prices from a monetary policy shock are primarily affected by foreign capital because foreign capital responds more strongly than domestic capital to unconventional monetary policy.

Investor sentiment, investor crowded-trade behavior, and limited arbitrage in the cross section of stock returns

We examine the interaction effects of investor sentiment, investor crowded-trade behavior, and limited arbitrage on the cross section of stock returns. This paper presents strong evidence to reveal that investor crowded-trade behavior will increase stock prices greatly (little) among stocks with positive (negative) investor sentiment; and investor sentiment will increase (not increase) stock prices among stocks with extreme seller-initiated (buyer-initiated) crowded-trade behavior. Furthermore, this paper finds that the benchmark-adjusted returns are positive among stocks with relatively positive investor sentiment and buyer-initiated crowded-trade behavior, and negative among stocks with relatively negative investor sentiment and seller-initiated crowded-trade behavior. Finally, this paper demonstrates that limited arbitrage plays more roles on stocks with pessimistic sentiment and seller-initiated crowded-trade behavior. Taken together, this paper confirms the combined effects of investor sentiment and investor crowded-trade behavior on the cross section of stock returns, and further explores the moderating effect of limited arbitrage.

Pengaruh Penilaian Kualitas Pinjaman dan Harga Saham pada Perusahaan Perbankan (Periode 2014 – 2016)

The purpose of this study is to determine the effect of current and non-performing loans against stock prices of banking companies listed on the Indonesia Stock Exchange for the period of observation in 2014 until 2016. Bank Indonesia in its regulation provides criteria of loan collectibility into 4 kinds that is current, in special attention, substandard and loss or non performing loans. This study focuses only on the view of current loans and non performings loans. From linear regression result obtained positive influence from current lending to stock price increase and negative influence from non performings loans to stock price increase. From the results of simultaneous testing results obtained that the current loans and non performings loans affect stock price changes in banking companies observation period 2014 to 2016.