Implications for Investors and Stakeholders

Oct 13, 2025 by windailys.com 138 views

The Influence of Profitability, Leverage, and Macroeconomics on the Stock Prices of Property and Real Estate Companies on the Indonesia Stock Exchange

Introduction

The Indonesia Stock Exchange (IDX) is one of the most prominent stock exchanges in Southeast Asia, offering a wide range of investment opportunities to both local and foreign investors. Among the various investment instruments available on the IDX, shares of property and real estate companies are particularly attractive due to their potential for long-term growth and high returns. However, understanding the factors that influence the stock prices of these companies is crucial for investors to make informed decisions and optimize their portfolios.

The Importance of Understanding Profitability, Leverage, and Macroeconomics

Profitability, leverage, and macroeconomic factors are three critical variables that can significantly impact the stock prices of property and real estate companies on the IDX. Profitability refers to a company's ability to generate profits from its operations, while leverage refers to the use of debt to finance a company's assets. Macroeconomic factors, such as interest rates and exchange rates, can also affect the stock prices of these companies.

In this study, we aim to investigate the influence of profitability, leverage, and macroeconomic factors on the stock prices of property and real estate companies listed on the IDX. By analyzing the relationships between these variables, we can provide valuable insights for investors, stakeholders, and policymakers in the property and real estate industry.

Research Methodology

This study uses secondary data taken from the Indonesia Stock Exchange website (www.idx.co.id), which includes 32 of 46 companies listed on the IDX during the period 2010 to 2013. The variables analyzed in this study include stock prices as the dependent variable, as well as profitability, leverage, and macroeconomic factors as independent variables. To analyze the relationship between variables, this study uses multiple linear regression analysis.

Research Results

The results of this study show that simultaneous profitability, leverage, and macroeconomic factors have a significant influence on the share price of property companies and real estate on the IDX. However, when it was tested partially, it was found that the influence of each variable was different:

Profitability

This variable has a positive and significant influence on stock prices. This shows that the higher the company's profitability, the higher the share price. It can be interpreted that investors tend to trust more to invest in companies that show good financial performance.

Leverage

The results show that leverage has a negative and significant influence on stock prices. High leverage means the company has a large debt compared to the capital they have. This condition can pose a greater risk for investors, so that stock prices tend to fall.

Macroeconomic Factors

This research also analyzes the influence of interest rates and exchange rates. The results show that interest rates have a negative influence, although not significant on stock prices. This shows that although changes in interest rates can affect investment decisions, the impact may not be immediately seen in stock prices. While the exchange rate has a positive influence, but is also not significant on stock prices.

Conclusion

From the analysis conducted, it can be concluded that profitability is the most dominant factor in influencing the share price of property companies and real estate in Indonesia. Meanwhile, high leverage tends to reduce stock prices due to the risks generated. Macroeconomic factors such as interest rates and exchange rates, although it affects, does not show a significant impact in the short term.

Implications for Investors and Stakeholders

It is essential for investors to consider these three variables in making investment decisions. By understanding the factors that affect stock prices, investors can optimize their portfolio and make wiser decisions. This study provides valuable insights for stakeholders in the property and real estate industry as well as for investors who are interested in investing in this sector.

Recommendations for Future Research

This study provides a foundation for future research on the influence of profitability, leverage, and macroeconomic factors on the stock prices of property and real estate companies on the IDX. Future studies can explore the impact of other variables, such as corporate governance and industry trends, on the stock prices of these companies. Additionally, researchers can investigate the effects of these variables on the stock prices of companies listed on other stock exchanges in Southeast Asia.

Limitations of the Study

This study has several limitations. Firstly, the sample size is limited to 32 companies listed on the IDX during the period 2010 to 2013. Secondly, the study only analyzes the influence of profitability, leverage, and macroeconomic factors on the stock prices of property and real estate companies. Future studies can explore the impact of other variables on the stock prices of these companies.

Conclusion

In conclusion, this study provides valuable insights into the influence of profitability, leverage, and macroeconomic factors on the stock prices of property and real estate companies on the IDX. The results show that profitability is the most dominant factor in influencing the share price of these companies, while high leverage tends to reduce stock prices due to the risks generated. Macroeconomic factors, such as interest rates and exchange rates, although it affects, does not show a significant impact in the short term.
Frequently Asked Questions (FAQs) on the Influence of Profitability, Leverage, and Macroeconomics on the Stock Prices of Property and Real Estate Companies on the Indonesia Stock Exchange

Q: What is the significance of understanding the influence of profitability, leverage, and macroeconomic factors on the stock prices of property and real estate companies on the IDX?

A: Understanding the influence of these factors is crucial for investors to make informed decisions and optimize their portfolios. By analyzing the relationships between these variables, investors can identify potential risks and opportunities, and make more informed investment decisions.

Q: What is the relationship between profitability and stock prices?

A: The results of this study show that profitability has a positive and significant influence on stock prices. This means that companies with higher profitability tend to have higher stock prices, as investors tend to trust more to invest in companies that show good financial performance.

Q: What is the impact of leverage on stock prices?

A: The results of this study show that leverage has a negative and significant influence on stock prices. This means that companies with high leverage tend to have lower stock prices, as high leverage can pose a greater risk for investors.

Q: How do macroeconomic factors, such as interest rates and exchange rates, affect stock prices?

A: The results of this study show that interest rates have a negative influence, although not significant on stock prices. This means that changes in interest rates can affect investment decisions, but the impact may not be immediately seen in stock prices. The exchange rate has a positive influence, but is also not significant on stock prices.

Q: What are the implications of this study for investors and stakeholders in the property and real estate industry?

A: This study provides valuable insights for investors and stakeholders in the property and real estate industry. By understanding the factors that affect stock prices, investors can optimize their portfolio and make wiser decisions. This study also highlights the importance of considering profitability, leverage, and macroeconomic factors in making investment decisions.

Q: What are the limitations of this study?

A: This study has several limitations. Firstly, the sample size is limited to 32 companies listed on the IDX during the period 2010 to 2013. Secondly, the study only analyzes the influence of profitability, leverage, and macroeconomic factors on the stock prices of property and real estate companies. Future studies can explore the impact of other variables on the stock prices of these companies.

Q: What are the recommendations for future research?

A: This study provides a foundation for future research on the influence of profitability, leverage, and macroeconomic factors on the stock prices of property and real estate companies on the IDX. Future studies can explore the impact of other variables, such as corporate governance and industry trends, on the stock prices of these companies. Additionally, researchers can investigate the effects of these variables on the stock prices of companies listed on other stock exchanges in Southeast Asia.

Q: What are the practical implications of this study for investors and stakeholders in the property and real estate industry?

A: This study provides practical implications for investors and stakeholders in the property and real estate industry. By understanding the factors that affect stock prices, investors can make more informed investment decisions and optimize their portfolios. This study also highlights the importance of considering profitability, leverage, and macroeconomic factors in making investment decisions.

Q: What are the future directions for research on the influence of profitability, leverage, and macroeconomic factors on the stock prices of property and real estate companies on the IDX?

A: Future research can explore the impact of other variables, such as corporate governance and industry trends, on the stock prices of property and real estate companies on the IDX. Additionally, researchers can investigate the effects of these variables on the stock prices of companies listed on other stock exchanges in Southeast Asia.