RELATIONSHIP BETWEEN MACRO ECONOMIC VARIABLE AND STOCK MARKET INDICES 1999-2010 PERIOD : CO-INTEGRATION EVIDENCES FROM STOCK EXCHANGE OF INDONESIA (IDX)

MARDIAH, RADHIATI (2011) RELATIONSHIP BETWEEN MACRO ECONOMIC VARIABLE AND STOCK MARKET INDICES 1999-2010 PERIOD : CO-INTEGRATION EVIDENCES FROM STOCK EXCHANGE OF INDONESIA (IDX). S1 thesis, Universitas Andalas.

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Abstract

The existence of capital market in Indonesia is one important factor in the development of national economy, has many industries and companies that use these institutions as a medium to absorb investment and the media to strengthen its flnancial position. In fact, capital markets has become a financial nerve center in modern economy today, even modern economy could not exist without a strong capital markets and global competitiveness and well-organized. Capital markets have become a very important instrument for a country even capital markets are also used as an indicator for the development of a country. The development of capital markets can be viewed through the Indicator composite stock price index (CSPl) found in IDX. The development of composite stock price index in 1999-2010 is very volatile and tends to decline very sharply during 2008 and recovery in 2009, it was in line with its to fluctuation economic conditions within and outside the country at that time. And if you look at the financial ratios that reflect the company's fundamentals in the period 1999-2010 did not experience significant fluctuations. This indicates that fluctuations in stock prices that occurred in 1999-2000 are not caused by factors fundamental company but due to the macroeconomic situation both within and outside tfie country. Based on the above description then the problem will be discussed further in this study is that stock price fluctuations related to changes in macroeconomic variables, so that can know how much influence the varidrles ofeconomic verifies on stock price movements.

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