The Effect of Financial Performance on Stock Prices of Real Estate and Property Companies Listed on the IDX

Oct 13, 2025 by wbrum.org 50 views

The Effect of Financial Performance on Stock Prices of Real Estate and Property Companies Listed on the IDX

Introduction

The Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a wide range of companies listed across various sectors, including real estate and property. The performance of these companies is a crucial factor in determining the stock prices, and investors often rely on financial ratios to make informed investment decisions. This study aims to investigate the effect of financial performance on the stock prices of real estate and property companies listed on the IDX.

Background

The real estate and property sector is a significant contributor to the Indonesian economy, with a growing demand for housing and commercial spaces. The sector has attracted significant investment from both local and foreign investors, making it an attractive area for research. However, the sector is also subject to various risks, including market fluctuations, economic downturns, and regulatory changes. As a result, investors need to carefully evaluate the financial performance of companies in this sector before making investment decisions.

Methodology

This study uses an associative design, where the relationship between independent and dependent variables is analyzed. The research population included 50 real estate and property companies listed on the IDX in the 2008-2009 period. The research sample was taken using purposive sampling (judgment sampling) with a total of 25 companies. The data analysis was carried out using multiple regression and simple regression. Statistical tests, including T-test and F-test, were used to determine the effect of independent variables on the dependent variable.

Data Analysis

The results of the study showed that partially, the Return On Equity (ROE), Debt to Equity Ratio (DER), and Price Earning Ratio (PER) had no effect on stock prices. However, simultaneously, Debt Equity Ratio (DER), Price Earning Ratio (PER), and Return on Equity (ROE) affect stock prices. The adjusted R Square showed a value of 0.037, which means 3.7% changes in stock prices can be explained by the independent variables in this study, while the remaining 96.3% are explained by other factors that are not included in this study.

Discussion

The results of this study indicate that financial performance, measured through DER, PER, and ROE ratios, has a significant influence on the share price of real estate and property companies on the IDX as a whole. However, this influence is not partially significant. This shows that financial performance is not the only factor that determines stock prices. Other factors such as macroeconomic conditions, market sentiment, and government policy also play an important role in determining stock prices.

Implications for Investors

This study has important implications for investors who want to invest in the real estate and property sectors. Investors need to consider the company's overall financial performance, including DER, PER, and ROE ratios, before deciding to invest. However, investors also need to consider other factors that can affect stock prices, such as macroeconomic conditions, market sentiment, and government policies.

Suggestions for Future Research

This study can be continued by considering other factors that can affect the share price of real estate and property companies, such as macroeconomic conditions, market sentiment, and government policy. This study can also be expanded using longer period data to get a more comprehensive picture of the effect of financial performance on stock prices.

Conclusion

In conclusion, this study provides valuable insights into the effect of financial performance on the stock prices of real estate and property companies listed on the IDX. The results of the study indicate that financial performance has a significant influence on the share price of these companies, but other factors also play an important role in determining stock prices. Investors need to carefully evaluate the financial performance of companies in this sector before making investment decisions.

Limitations of the Study

This study has several limitations, including the use of a limited sample size and the focus on a specific period of time. Future studies can expand on this research by using a larger sample size and a longer period of time.

Future Research Directions

Future research can explore the effect of other factors on the stock prices of real estate and property companies, such as macroeconomic conditions, market sentiment, and government policy. Additionally, future research can investigate the impact of financial performance on the stock prices of companies in other sectors.

References

[1] Indonesia Stock Exchange. (2022). IDX Fact Book 2022.
[2] World Bank. (2022). Indonesia Overview.
[3] Central Bureau of Statistics. (2022). Indonesia in Figures 2022.

Appendices

[1] List of companies included in the study.
[2] Data analysis tables and figures.
[3] Additional tables and figures.

Abstract

This study investigates the effect of financial performance on the stock prices of real estate and property companies listed on the IDX. The results of the study show that financial performance has a significant influence on the share price of these companies, but other factors also play an important role in determining stock prices. Investors need to carefully evaluate the financial performance of companies in this sector before making investment decisions.
Q&A: The Effect of Financial Performance on Stock Prices of Real Estate and Property Companies Listed on the IDX

Introduction

In our previous article, we discussed the effect of financial performance on the stock prices of real estate and property companies listed on the Indonesia Stock Exchange (IDX). This article provides a Q&A section to further clarify the findings of the study and provide additional insights for investors and researchers.

Q1: What is the significance of financial performance in determining stock prices?

A1: Financial performance is a crucial factor in determining stock prices, as it provides investors with an indication of a company's ability to generate profits and pay dividends. In the case of real estate and property companies, financial performance is particularly important, as it can affect the company's ability to pay off debts and maintain its market value.

Q2: What are the key financial ratios used in this study?

A2: The key financial ratios used in this study are:

Debt to Equity Ratio (DER): measures a company's level of indebtedness
Price Earning Ratio (PER): measures a company's stock price relative to its earnings
Return on Equity (ROE): measures a company's profitability

Q3: What are the implications of this study for investors?

A3: The study's findings suggest that investors should consider a company's financial performance, including DER, PER, and ROE ratios, when making investment decisions. However, investors should also consider other factors that can affect stock prices, such as macroeconomic conditions, market sentiment, and government policies.

Q4: What are the limitations of this study?

A4: The study has several limitations, including the use of a limited sample size and the focus on a specific period of time. Future studies can expand on this research by using a larger sample size and a longer period of time.

Q5: What are the future research directions for this study?

A5: Future research can explore the effect of other factors on the stock prices of real estate and property companies, such as macroeconomic conditions, market sentiment, and government policy. Additionally, future research can investigate the impact of financial performance on the stock prices of companies in other sectors.

Q6: How can investors use the findings of this study to make informed investment decisions?

A6: Investors can use the findings of this study to consider a company's financial performance, including DER, PER, and ROE ratios, when making investment decisions. However, investors should also consider other factors that can affect stock prices, such as macroeconomic conditions, market sentiment, and government policies.

Q7: What are the implications of this study for policymakers?

A7: The study's findings suggest that policymakers should consider the impact of financial performance on the stock prices of real estate and property companies when making policy decisions. Policymakers can use the findings of this study to develop policies that promote financial stability and support the growth of the real estate and property sector.

Q8: How can researchers use the findings of this study to inform future research?

A8: Researchers can use the findings of this study to inform future research by exploring the effect of other factors on the stock prices of real estate and property companies. Researchers can also investigate the impact of financial performance on the stock prices of companies in other sectors.

Q9: What are the practical implications of this study for the real estate and property sector?

A9: The study's findings suggest that the real estate and property sector should consider the impact of financial performance on stock prices when making investment decisions. The sector can use the findings of this study to develop strategies that promote financial stability and support the growth of the sector.

Q10: What are the future directions for the real estate and property sector?

A10: The future directions for the real estate and property sector include exploring the effect of other factors on the stock prices of real estate and property companies, such as macroeconomic conditions, market sentiment, and government policy. The sector can also investigate the impact of financial performance on the stock prices of companies in other sectors.

Conclusion

In conclusion, this Q&A section provides additional insights into the effect of financial performance on the stock prices of real estate and property companies listed on the IDX. The study's findings suggest that investors, policymakers, and researchers should consider the impact of financial performance on stock prices when making investment decisions, developing policies, and informing future research.