Understanding the dynamics of the capital market is crucial

Oct 13, 2025 by magicalceylontours.com 80 views

Introduction

Understanding the dynamics of the capital market is crucial for investors, especially in the food and beverage sector listed on the Indonesia Stock Exchange. The stock prices of these companies are influenced by various factors, which can either positively or negatively impact their value. This study aims to investigate the factors affecting the stock prices of food and beverage companies listed on the Indonesia Stock Exchange, specifically during the period of 2013 to 2017.

Literature Review

The literature review provides an overview of the existing research on the factors affecting stock prices. Several studies have investigated the impact of various factors on stock prices, including trading volume activity, book value per share, earning per share, price earning ratio, and firm size. However, the results of these studies have been inconsistent, and there is a need for further research to understand the dynamics of the capital market.

Methodology

This study uses a quantitative approach, employing secondary data obtained from the annual financial statements of 14 food and beverage companies listed on the Indonesia Stock Exchange. The data covers the period of 2013 to 2017. The analysis methods applied include descriptive statistics and multiple linear regression analysis of panel data.

Results

The results of this study show that simultaneously, the five factors (trading volume activity, book value per share, earning per share, price earning ratio, and firm size) have a positive and significant influence on stock prices. However, when analyzed partially, some interesting things were found.

Trading Volume Activity (TVA)

Although trading volume activity has a positive effect on stock prices, it does not show significant significance. This indicates that high trading activities do not always reflect the value of strong shares.

Earning Per Share (EPS)

Earning per share actually has an insignificant negative impact on stock prices. This suggests that although profit per share increases, it is not always translated into stock price increases.

Book Value Per Share (BVPS)

Book value per share shows a positive and significant effect on stock prices. This indicates that a high book value per share can contribute positively to investor perceptions and ultimately affect stock prices.

Price Earning Ratio (PER)

Price earning ratio also shows a positive and significant effect on stock prices. This suggests that a healthy price earning ratio can contribute positively to investor perceptions and ultimately affect stock prices.

Firm Size

Firm size shows a positive and significant effect on stock prices. This indicates that a large company size can contribute positively to investor perceptions and ultimately affect stock prices.

Discussion

The results of this study have several implications for investors. Understanding the factors affecting stock prices can provide a clearer picture of the trend of the stock market in the food and beverage sector. This knowledge can be used to predict future stock price movements and maximize potential profit.

Conclusion

In conclusion, the food and beverage sector on the Indonesia Stock Exchange is not only influenced by company performance on paper, but also by the dynamics of market and investor perceptions. This study highlights the importance of comprehensive analysis in the investment world to understand the factors that play a role in determining stock prices.

Recommendations

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

Investors should consider the factors affecting stock prices, including trading volume activity, book value per share, earning per share, price earning ratio, and firm size.
Investors should use this knowledge to predict future stock price movements and maximize potential profit.
Companies listed on the Indonesia Stock Exchange should focus on improving their performance on paper, as well as enhancing their market and investor perceptions.

Limitations

This study has several limitations, including:

The study only focuses on the food and beverage sector listed on the Indonesia Stock Exchange.
The study only uses secondary data obtained from the annual financial statements of 14 companies.
The study only covers the period of 2013 to 2017.

Future Research Directions

Future research should focus on investigating the factors affecting stock prices in other sectors listed on the Indonesia Stock Exchange. Additionally, future research should use primary data to provide a more comprehensive understanding of the dynamics of the capital market.

References

[List of references]

Note: The references should be listed in a separate section at the end of the article.

Q: What are the factors that affect stock prices of food and beverage companies listed on the Indonesia Stock Exchange?

A: The factors that affect stock prices of food and beverage companies listed on the Indonesia Stock Exchange include trading volume activity, book value per share, earning per share, price earning ratio, and firm size.

Q: What is trading volume activity, and how does it affect stock prices?

A: Trading volume activity refers to the number of shares traded in a given period. Although it has a positive effect on stock prices, it does not show significant significance. This indicates that high trading activities do not always reflect the value of strong shares.

Q: What is earning per share, and how does it affect stock prices?

A: Earning per share refers to the profit earned by a company per share. Earning per share actually has an insignificant negative impact on stock prices. This suggests that although profit per share increases, it is not always translated into stock price increases.

Q: What is book value per share, and how does it affect stock prices?

A: Book value per share refers to the value of a company's assets minus its liabilities, divided by the number of outstanding shares. Book value per share shows a positive and significant effect on stock prices. This indicates that a high book value per share can contribute positively to investor perceptions and ultimately affect stock prices.

Q: What is price earning ratio, and how does it affect stock prices?

A: Price earning ratio refers to the ratio of a company's stock price to its earning per share. Price earning ratio also shows a positive and significant effect on stock prices. This suggests that a healthy price earning ratio can contribute positively to investor perceptions and ultimately affect stock prices.

Q: What is firm size, and how does it affect stock prices?

A: Firm size refers to the market capitalization of a company. Firm size shows a positive and significant effect on stock prices. This indicates that a large company size can contribute positively to investor perceptions and ultimately affect stock prices.

Q: How can investors use this knowledge to predict future stock price movements and maximize potential profit?

A: Investors can use this knowledge to predict future stock price movements and maximize potential profit by considering the factors affecting stock prices, including trading volume activity, book value per share, earning per share, price earning ratio, and firm size.

Q: What are the implications of this study for investors and companies listed on the Indonesia Stock Exchange?

A: The implications of this study are that investors should consider the factors affecting stock prices, and companies listed on the Indonesia Stock Exchange should focus on improving their performance on paper, as well as enhancing their market and investor perceptions.

Q: What are the limitations of this study?

A: The limitations of this study are that it only focuses on the food and beverage sector listed on the Indonesia Stock Exchange, it only uses secondary data obtained from the annual financial statements of 14 companies, and it only covers the period of 2013 to 2017.

Q: What are the future research directions?

A: Future research should focus on investigating the factors affecting stock prices in other sectors listed on the Indonesia Stock Exchange, and using primary data to provide a more comprehensive understanding of the dynamics of the capital market.

Q: What are the references used in this study?

A: The references used in this study are listed in a separate section at the end of the article.

Note: The references should be listed in a separate section at the end of the article.