Systematic risk and accounting determinants: a new perspective from an emerging market Online publication date: Mon, 02-Sep-2013
by Dian Citra Aruna; Ari Warokka
J. for Global Business Advancement (JGBA), Vol. 6, No. 1, 2013
Abstract: This study is to test the influences of basic accounting determinants on Indonesian manufacturing industry's systematic risk in the most-recent period, 2005-2007, in order to capture the latest market's perspectives and preferences. By using current ratio, debt to total asset ratio, Long-term Debt to Total Asset (LDTA) ratio, firm size, and growth as the proxies for accounting determinants and beta as the proxy for systematic risk, we investigated 15 top and most-traded Indonesian manufacturing firms' stocks. The results revealed a striking and surprising phenomenon, which no accounting determinants influence at all the systematic risk. It demonstrated the market behaviour that paid less attention to the financial statement information, and seemed to focus more on technical analysis in making an investment decision. It implicitly highlighted on how to manage a market that seemingly is sensitive to non-fundamental factors, i.e., market sentiment and macroeconomic rumours, the main drivers of technical analysis.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the J. for Global Business Advancement (JGBA):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook