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Domestic and foreign factors for stock prices in Indonesia

Author

Listed:
  • Rahajeng Cahyaning Putri Cipto
  • Akhsyim Afandi

    (Semesta Resource Yogyakarta, Yogyakarta
    Faculty of Economics, Universitas Islam Indonesia)

Abstract

Indonesia has been developing various sectors of its economy, and so it needs a huge amount of capital. Therefore, it has been putting a lot of efforts to develop its capital market. This paper analyzes the impacts of domestic and foreign factors on Indonesia stock price. Some considered domestic factors are interest rates, production index, and foreign exchange rates. Various considered foreign factors are Singapore and US stock prices. The paper uses Vector Error Correction Mechanism model to analyze the data. The estimation results suggest that all variables significantly influence Indonesia stock price, with Singapore stock price as the dominant factors.

Suggested Citation

  • Rahajeng Cahyaning Putri Cipto & Akhsyim Afandi, 2012. "Domestic and foreign factors for stock prices in Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 4(2), pages 141-153, April.
    • Handle: RePEc:uii:journl:v:2:y:2010:i:2:p:141-153
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    References listed on IDEAS

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    More about this item

    Keywords

    Stock price; interest rates; exchange rates; production index;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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