The Effect of Financial Performance Indicators on Stock Prices in the Banking Sector Listed on the IDX

Nadia Ristanti; Dian Mega Pratiwi

doi:10.47134/aaem.v3i1.829

Authors

Nadia Ristanti Universitas Widyatama
Dian Mega Pratiwi Universitas Widyatama

DOI:

https://doi.org/10.47134/aaem.v3i1.829

Keywords:

Earning Per Share, Market Capitalization, Multiple Linear Regression, Price To Book Value, Stock Prices

Abstract

The stability of the banking sector is a crucial foundation for the resilience of the national financial system, especially in the face of global economic dynamics. This study aims to analyze the effect of Earnings Per Share (EPS), Price to Book Value (PBV), and Market Capitalization (MC) on the stock prices of banks listed on the Indonesia Stock Exchange (IDX). A quantitative approach is employed using multiple linear regression analysis, based on secondary data from financial statements and monthly stock prices of three selected banks during the period from January 2022 to December 2023. The results show that all three independent variables have a significant effect on stock prices, both simultaneously and partially. EPS and PBV have a negative influence, while MC has a positive influence. These findings indicate that while fundamental financial performance is important, market perception of a company’s value and size also plays a critical role in determining stock prices. This study recommends that investors consider key financial indicators in their investment decisions and encourages bank management to maintain balanced financial performance. Future research is suggested to include macroeconomic variables such as interest rates, inflation, or monetary policy to provide a more comprehensive analysis of stock price movements in the banking sector.

References

Abubakar, A., & Handayani, S. (2021). The influence of earnings per share and book value on stock prices of listed banks in Nigeria. International Journal of Economics and Finance, 13(2), 44–51.

Awan, A. G., & Amin, M. (2020). Impact of profitability ratios on stock price: Empirical evidence from Pakistan. Global Journal of Management and Business Research, 20(2), 55–64.

Barua, S., & Uddin, M. (2021). Financial ratios and equity prices: An empirical study from Bangladesh. International Journal of Financial Studies, 9(4), 70. https://doi.org/10.3390/ijfs9040070

Brigham, E. F., & Houston, J. F. (2019). Fundamentals of Financial Management (15th ed.). Cengage Learning.

Budianto, A., & Nugroho, A. (2022). Kinerja keuangan terhadap harga saham pada sektor perbankan syariah di Indonesia. Jurnal Ekonomi dan Perbankan Syariah, 10(1), 88–95.

Connelly, B. L., Certo, S. T., Ireland, R. D., & Reutzel, C. R. (2019). Signaling theory: A review and assessment. Journal of Management, 45(6), 2434–2459. https://doi.org/10.1177/0149206319864157

Dewi, L. P., & Mahardika, D. (2020). Kinerja keuangan dan dampaknya terhadap harga saham: Studi pada sektor perbankan. Jurnal Manajemen dan Akuntansi, 12(1), 45–54.

Fama, E. F., & French, K. R. (2020). The cross-section of expected stock returns revisited. The Journal of Financial Economics, 138(3), 605–634.

Farooq, U., & Nasir, Z. M. (2020). Earnings per share, dividend policy and stock price: Evidence from emerging economies. Journal of Finance and Accounting Research, 2(1), 1–15.

Fitriyani, S., & Nurhalimah, S. (2022). Pengaruh kinerja keuangan terhadap harga saham sektor perbankan di BEI. Jurnal Ekonomi dan Perbankan Syariah, 10(1), 91–102.

Ghasemi, A., & Zahediasl, S. (2012). Normality tests for statistical analysis: A guide for non-statisticians. International Journal of Endocrinology and Metabolism, 10(2), 486–489. https://doi.org/10.5812/ijem.3505

Gunawan, B., Effendi, N., & Santosa, P. W. (2020). Pengaruh EPS, DER, dan ROE terhadap harga saham sektor perbankan. Jurnal Ilmu dan Riset Akuntansi, 9(3), 1–15.

Gunawan, H., & Putri, A. D. (2023). Analisis profitabilitas sebagai penentu harga saham perusahaan keuangan. Jurnal Ekonomi dan Bisnis Terapan, 7(1), 39–48.

Hanif, M., & Malik, F. (2021). ROA and stock prices: Empirical study of the Indonesian banking industry. Jurnal Keuangan dan Perbankan, 25(2), 101–112.

Haryono, T., & Putra, E. (2020). Determinants of stock price in financial sector: Profitability as the main predictor. Journal of Business Research and Accounting, 6(2), 56–67.

Hasan, R., & Mulyadi, M. (2022). Return on assets dan harga saham perusahaan perbankan syariah. Jurnal Ekonomi Syariah dan Keuangan Islam, 9(3), 115–127.

Ibrahim, M., & Sulaiman, S. (2019). Financial performance indicators and market price of stocks: Evidence from Malaysia. Asian Journal of Accounting and Governance, 13, 1–12.

Imelda, I., & Priyanto, S. (2021). Price to book value dan EPS terhadap harga saham sektor perbankan. Jurnal Ilmu Manajemen, 9(2), 150–159.

Kurniawan, R., & Yulia, R. (2022). Analisis EPS dan PBV terhadap harga saham perbankan di Indonesia. Jurnal Investasi dan Akuntansi Bisnis, 8(1), 51–62.

Oktaviani, R., & Prasetiono, P. (2023). Pengaruh kapitalisasi pasar terhadap harga saham sektor perbankan di Indonesia. Jurnal Ekonomi dan Perbankan, 25(1), 45–54.

Putra, Y. A., & Asandimitra, N. (2022). Pengaruh PBV, ROE, dan EPS terhadap harga saham perbankan yang terdaftar di BEI. Jurnal Ilmu Manajemen, 10(2), 167–174.

Rahmah, A. N., Yuliana, E., & Kurniawan, R. (2022). Analisis pengaruh EPS, PBV, dan ROA terhadap harga saham bank BUMN. Jurnal Riset Akuntansi dan Keuangan, 10(1), 12–23.

World Bank. (2021). Banking sector resilience in emerging markets: How strong are the shock absorbers? Retrieved from https://www.worldbank.org/en/topic/financialsector/publication/banking-sector-resilience