Title: Factors determining stock returns in property, real estate and construction companies in Indonesia

Authors: Henny Medyawati; Muhamad Yunanto

Addresses: Department of Economics, Gunadarma University, Margonda Raya 100, Pondok Cina, Depok, West Java, Indonesia ' Department of Economics, Gunadarma University, Margonda Raya 100, Pondok Cina, Depok, West Java, Indonesia

Abstract: The main reason for investors or potential investors to invest in stocks is to derive maximum returns at minimum risk. One of the many factors determining stock returns from a company's shares consists of the company's financial ratios. The better the level of financial performance of the company, greater is the expectation of increase in its stock prices, and larger the benefit (return) from its shares to investors. The purpose of this study is to assess the impact of four factors, namely price-to-book value (PBV), the current ratio, debt-to-equity ratio (DER) and total assets turnover (TATO) on the level of stock returns in property, real estate and building construction firms listed in the Indonesian Stock Exchange for the period 2011-2014. The sample used in this study consisted of 18 companies, selected through the purposive sampling method. Regression analysis of panel data is the analytical tool used. The results have shown that TATO, DER and PBV influence the stock returns significantly.

Keywords: current ratio; debt-to-equity ratio; price-to-book value; total assets turnover.

DOI: 10.1504/IJGSB.2017.084707

International Journal of Globalisation and Small Business, 2017 Vol.9 No.1, pp.3 - 19

Received: 06 Jul 2016
Accepted: 04 Apr 2017
Published online: 21 Jun 2017 *

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