Analysis of the Effect of Fundamental Variables on Mining Company Stock Prices on the Indonesia Stock Exchange

Oct 13, 2025 by leolavanderia.com.br 69 views

Analysis of the Effect of Fundamental Variables on Mining Company Stock Prices on the Indonesia Stock Exchange

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. Among these sectors, the mining sector is a significant contributor to the country's economy, with many companies listed on the IDX. The performance of these companies is closely watched by investors, who seek to make informed investment decisions based on various factors, including fundamental variables. This study aims to analyze the effect of fundamental variables on the stock prices of mining companies listed on the IDX.

Background and Literature Review

The capital market theory states that stock prices reflect the intrinsic value of a company, which is influenced by fundamental factors such as profitability, leverage, and growth. Fundamental variables, such as return on equity (ROE), earnings per share (EPS), price-earning ratio (Per), debt-to-equity ratio (DER), and interest rates, are widely used by investors to evaluate the performance of companies and make investment decisions. However, the relationship between these fundamental variables and stock prices is complex and influenced by various factors.

Methodology

This study uses secondary data from the annual financial statements and stock prices of mining sector companies listed on the IDX, obtained from the website www.idx.co.id in the 2009-2012 period. The number of observations obtained is 48 (the number of mining sector companies multiplied by the observation period). Data collection methods used are historical data (historical documentation) and data analysis techniques used are multiple linear regression.

Results

The results of the study show that:

Simultaneously, ROE, EPS, Per, DER, and interest rates have a significant influence on the stock price of mining companies listed on the IDX.
Partially, EPS and Per have a significant positive influence on the stock price of mining companies listed on the IDX. DER has a significant negative influence on the stock price of mining companies listed on the IDX. ROE has no significant influence on the stock price of mining companies listed on the IDX, as well as interest rates.

Further Analysis

The results of this study indicate that the fundamental variable has a significant influence on the stock price of mining companies on the IDX. This finding is in line with the capital market theory, which states that stock prices reflect the intrinsic value of the company, which is influenced by fundamental factors such as profitability, leverage, and growth.

EPS and Per:

The results show that EPS and Per have a positive influence on stock prices. This shows that investors tend to give a higher assessment to companies that have a high level of profitability, reflected in high EPS, and high ratios. Companies with high EPS and Per are considered to be more profitable and have a higher growth potential, which attracts investors.

DER:

DER has a negative effect on stock prices. This shows that investors tend to avoid companies that have a high level of leverage, reflected in high DER. Investors view companies with high leverage as high-risk companies, as they are more vulnerable to financial distress and default.

ROE and interest rates:

Although ROE and interest rates do not have a significant influence, the simultaneous effect of all variables shows that ROE and interest rates still have an influence on stock prices, although the effect is not as strong as other variables.

Implications

The results of this study have implications for investors and mining company management. Investors can use fundamental variable information to make better investment decisions. Mining companies can use the results of this study as a reference to improve company performance and increase the value of its shares.

Suggestion

Subsequent research can be done by expanding the observation period, considering other fundamental variables, and using a more sophisticated analysis method. In addition, research can also be done by comparing the effect of fundamental variables on stock prices in the mining sector with other sectors.

Conclusion

This study provides evidence that fundamental variables have a significant influence on the stock prices of mining companies listed on the IDX. The results of this study have implications for investors and mining company management, and provide a reference for future research in this area.

Limitations

This study has several limitations. Firstly, the study uses secondary data, which may not be comprehensive or up-to-date. Secondly, the study only considers a limited number of fundamental variables, which may not capture the full range of factors that influence stock prices. Finally, the study only considers the mining sector, which may not be representative of other sectors.

Future Research Directions

Future research can be done by expanding the observation period, considering other fundamental variables, and using a more sophisticated analysis method. In addition, research can also be done by comparing the effect of fundamental variables on stock prices in the mining sector with other sectors.

References

[1] Capital Market Theory. (n.d.). Retrieved from https://www.investopedia.com/terms/c/capitalmarkettheory.asp
[2] Indonesia Stock Exchange. (n.d.). Retrieved from https://www.idx.co.id/
[3] Multiple Linear Regression. (n.d.). Retrieved from https://en.wikipedia.org/wiki/Linear_regression

Appendix

The appendix includes the detailed results of the multiple linear regression analysis, including the coefficients, standard errors, and p-values.
Frequently Asked Questions (FAQs) on the Analysis of the Effect of Fundamental Variables on Mining Company Stock Prices on the Indonesia Stock Exchange

Q: What is the purpose of this study?

A: The purpose of this study is to analyze the effect of fundamental variables on the stock prices of mining companies listed on the Indonesia Stock Exchange (IDX).

Q: What are the fundamental variables considered in this study?

A: The fundamental variables considered in this study are return on equity (ROE), earnings per share (EPS), price-earning ratio (Per), debt-to-equity ratio (DER), and interest rates.

Q: What is the methodology used in this study?

A: The methodology used in this study is multiple linear regression analysis, which is a statistical technique used to analyze the relationship between a dependent variable (stock price) and one or more independent variables (fundamental variables).

Q: What are the results of this study?

A: The results of this study show that ROE, EPS, Per, DER, and interest rates have a significant influence on the stock price of mining companies listed on the IDX. Specifically, EPS and Per have a positive influence on stock prices, while DER has a negative influence on stock prices.

Q: What are the implications of this study?

A: The implications of this study are that investors can use fundamental variable information to make better investment decisions, and mining companies can use the results of this study as a reference to improve company performance and increase the value of its shares.

Q: What are the limitations of this study?

A: The limitations of this study are that it uses secondary data, which may not be comprehensive or up-to-date, and it only considers a limited number of fundamental variables.

Q: What are the future research directions?

A: Future research directions include expanding the observation period, considering other fundamental variables, and using a more sophisticated analysis method.

Q: What are the references used in this study?

A: The references used in this study include the capital market theory, the Indonesia Stock Exchange, and multiple linear regression analysis.

Q: What is the conclusion of this study?

A: The conclusion of this study is that fundamental variables have a significant influence on the stock prices of mining companies listed on the IDX, and that investors and mining companies can use this information to make better investment decisions and improve company performance.

Q: What is the appendix of this study?

A: The appendix of this study includes the detailed results of the multiple linear regression analysis, including the coefficients, standard errors, and p-values.

Q: What is the significance of this study?

A: The significance of this study is that it provides evidence of the effect of fundamental variables on the stock prices of mining companies listed on the IDX, and it provides a reference for future research in this area.

Q: What are the potential applications of this study?

A: The potential applications of this study are that it can be used by investors to make better investment decisions, and by mining companies to improve company performance and increase the value of its shares.

Q: What are the potential limitations of this study?

A: The potential limitations of this study are that it may not be generalizable to other sectors or industries, and that it may not capture the full range of factors that influence stock prices.

Q: What are the potential future research directions?

A: The potential future research directions include expanding the observation period, considering other fundamental variables, and using a more sophisticated analysis method.