The Effect of Right Issue Announcements on the Level of Profit and Liquidity of Stocks on the Indonesian Stock Exchange

Oct 13, 2025 by magicalceylontours.com 30 views

The Effect of Right Issue Announcements on the Level of Profit and Liquidity of Stocks on the Indonesian Stock Exchange

Introduction

In the capital market world, the announcement of right issue is one of the strategies used by companies to increase their capital. Right Issue is an offer to existing shareholders to buy additional shares at prices that are usually lower than market prices. This study aims to understand the effect of the announcement of the right issue on the level of profit and liquidity of shares on the Indonesia Stock Exchange. The announcement of the right issue can have a significant impact on the market, and it is essential to understand how it affects the level of profit and liquidity of the company's shares.

Research Methods

This study uses a quantitative descriptive approach and relies on secondary data obtained from the official website of the Indonesia Stock Exchange (BEI) and Yahoo Finance. The population studied was all companies listed on the Indonesia Stock Exchange that had carried out the Right Issue, totaling 57 companies. Of these, 46 companies were chosen as samples using the target sample method. The analysis methods applied include descriptive analysis and hypothesis testing using paired sample t-test and Wilcoxon Rank Test.

Research Result

The results showed a significant difference in the level of profit before and after the announcement of the Right Issue. This indicates that the announcement can affect the company's financial performance, both positive and negative. Perhaps, a number of investors see opportunities on the Right Issue as a way to participate in company growth, thereby increasing demand for the shares concerned.

In addition, stock liquidity also underwent significant changes after the announcement of the Right Issue. Higher liquidity after the announcement can be interpreted that more transactions occur, which is usually related to increasing investor interest. However, it should be noted that increased liquidity can also be accompanied by higher volatility, which means a greater risk for investors.

The Impact of Right Issue Announcements on Profit and Liquidity

Announcements of Right Issue are often associated with investor perspectives on company financial health. If investors assume that Right Issue is a sign that companies need funds for debt expansion or restructuring, they may respond positively. However, if investors think that companies are unable to manage their funds well, this can result in a decrease in interest in these shares.

On the other hand, increased liquidity can also indicate that the market is more active in responding to news related to the company. Increased transactions can open up opportunities for new investors to enter, and provide opportunities for old investors to realize profits. However, this dynamics must also be watched out because it can cause sharp price fluctuations.

The Significance of the Study

Overall, the announcement of the Right Issue has a significant impact on the level of profit and liquidity of the company's shares listed on the Indonesia Stock Exchange. This study provides important insights for investors and stakeholders about how the company's strategic decisions can affect market perceptions and investment behavior.

By understanding this influence, it is hoped that investors can make more informational decisions in investing in the capital market. Further research can be done to analyze other factors that might affect the market response to the announcement of the right issue and to understand the long-term implications of this decision to the company concerned.

Conclusion

In conclusion, the announcement of the Right Issue has a significant impact on the level of profit and liquidity of the company's shares listed on the Indonesia Stock Exchange. This study provides important insights for investors and stakeholders about how the company's strategic decisions can affect market perceptions and investment behavior. By understanding this influence, it is hoped that investors can make more informational decisions in investing in the capital market.

Recommendations

Based on the findings of this study, the following recommendations are made:

Investors should be cautious when responding to the announcement of the Right Issue, as it can have a significant impact on the level of profit and liquidity of the company's shares.
Companies should carefully consider the timing and strategy of the Right Issue announcement to minimize the potential negative impact on the market.
Further research should be conducted to analyze other factors that might affect the market response to the announcement of the right issue and to understand the long-term implications of this decision to the company concerned.

Limitations of the Study

This study has several limitations that should be noted:

The study only analyzed the impact of the Right Issue announcement on the level of profit and liquidity of the company's shares listed on the Indonesia Stock Exchange.
The study did not consider other factors that might affect the market response to the announcement of the right issue.
The study only analyzed the short-term impact of the Right Issue announcement, and did not consider the long-term implications of this decision to the company concerned.

Future Research Directions

Based on the findings of this study, the following future research directions are suggested:

Analyze the impact of the Right Issue announcement on other financial metrics, such as return on equity (ROE) and debt-to-equity ratio.
Examine the impact of the Right Issue announcement on the market value of the company's shares.
Investigate the impact of the Right Issue announcement on the company's financial performance in the long term.

References

[List of references cited in the study]

Appendix

[List of tables and figures used in the study]

Abstract

This study aims to understand the effect of the announcement of the right issue on the level of profit and liquidity of shares on the Indonesia Stock Exchange. The results showed a significant difference in the level of profit before and after the announcement of the Right Issue. In addition, stock liquidity also underwent significant changes after the announcement of the Right Issue. The study provides important insights for investors and stakeholders about how the company's strategic decisions can affect market perceptions and investment behavior.
Frequently Asked Questions (FAQs) about the Effect of Right Issue Announcements on the Level of Profit and Liquidity of Stocks on the Indonesian Stock Exchange

Q: What is a right issue?

A: A right issue is an offer to existing shareholders to buy additional shares at prices that are usually lower than market prices. This is a strategy used by companies to increase their capital.

Q: How does a right issue announcement affect the level of profit of a company's shares?

A: The announcement of a right issue can affect the company's financial performance, both positively and negatively. Some investors may see opportunities on the right issue as a way to participate in company growth, thereby increasing demand for the shares concerned.

Q: How does a right issue announcement affect the liquidity of a company's shares?

A: The announcement of a right issue can also affect the liquidity of a company's shares. Higher liquidity after the announcement can be interpreted that more transactions occur, which is usually related to increasing investor interest.

Q: What are the potential risks associated with a right issue announcement?

A: Increased liquidity can also be accompanied by higher volatility, which means a greater risk for investors. Sharp price fluctuations can occur, and investors may lose money if they are not cautious.

Q: How can investors make more informed decisions when responding to a right issue announcement?

A: Investors should be cautious when responding to a right issue announcement, as it can have a significant impact on the level of profit and liquidity of the company's shares. They should carefully consider the timing and strategy of the right issue announcement to minimize the potential negative impact on the market.

Q: What are the implications of a right issue announcement for companies?

A: Companies should carefully consider the timing and strategy of the right issue announcement to minimize the potential negative impact on the market. They should also be prepared to communicate effectively with investors and stakeholders about the reasons behind the right issue and the potential benefits and risks associated with it.

Q: Can a right issue announcement have a long-term impact on a company's financial performance?

A: Yes, a right issue announcement can have a long-term impact on a company's financial performance. The announcement can affect the company's reputation and credibility, and can also impact the company's ability to attract and retain investors.

Q: What are the potential benefits of a right issue announcement for companies?

A: A right issue announcement can provide companies with the capital they need to grow and expand their business. It can also help companies to reduce their debt and improve their financial health.

Q: How can companies minimize the potential negative impact of a right issue announcement on their shares?

A: Companies can minimize the potential negative impact of a right issue announcement on their shares by carefully considering the timing and strategy of the announcement. They should also be prepared to communicate effectively with investors and stakeholders about the reasons behind the right issue and the potential benefits and risks associated with it.

Q: What are the potential risks associated with a right issue announcement for companies?

A: The potential risks associated with a right issue announcement for companies include a negative impact on their shares, a loss of investor confidence, and a decrease in their reputation and credibility.

Q: How can investors and stakeholders stay informed about a right issue announcement?

A: Investors and stakeholders can stay informed about a right issue announcement by monitoring the company's website, social media, and financial news outlets. They can also attend investor meetings and conferences to learn more about the company's plans and strategies.

Q: What are the implications of a right issue announcement for the Indonesian stock market?

A: A right issue announcement can have a significant impact on the Indonesian stock market, particularly if the company is a large and well-known player in the market. The announcement can affect the market's perception of the company's financial health and its ability to attract and retain investors.

Q: How can the Indonesian stock market regulators ensure that companies are transparent and accountable in their right issue announcements?

A: The Indonesian stock market regulators can ensure that companies are transparent and accountable in their right issue announcements by implementing strict disclosure requirements and monitoring the company's compliance with these requirements. They can also provide guidance and support to companies to help them navigate the process of making a right issue announcement.