The Influence Money Flows on Movement of Stock Prices in Indonesia: An Analysis on Banking Industry

11Abdul Rozak, 2Agatha Rinta Suhardi, 3Mohd Haizam Mohd Saudi

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Abstract:

The effect of interest rates and money supply on movement of stock prices become a major topic of discussion with in the goal of analyzing two variables toward stock price volatility at banking companies listed on Indonesia Stock Exchange 2011-2015 period. The method used is explanatory research with descriptive and verification. Empirically, the results showed that there is a very strong relation between interest rates and money supply amounted to 0.809 with high impact on stock prices at banking sector amounted to 64.3%. t test results showed that when value of interest rate increase of 1 unit assuming other variables are fixed, it will increase the stock price of 1,252. Then, if the value of money supply increased by 1 unit, assuming other variables are fixed, it will increase the price of shares amounted to 47.737. While the results of ANOVA test with a significance level of 0.000 obtained calculated F-value of 42.135 > F-table at 3.16. Thus jointly of variable interest rates and money supply significantly influence the price of state-owned banking sector stocks.

Keywords:

Interest rates, Money supply, Stock price.

Paper Details
Month2
Year2020
Volume24
IssueIssue 2
Pages2682-2688