The Effect of Stock Split Announcement: A Comparative Analysis between Spring-Up and Spring-Down Company at Indonesia Stock Exchange.

Tt{E

EFTEICI

OT

STOCh

SPLI

I AN

O['\CEMXNT:

A

COMPARATrvE

ANAIYSTS BETWEEN

SPRINC-UP

AND

SPRING-DOWN COMPAI\IY

AT IA-DONESIA

STOCK

EXCIIANGN

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Si.inslrehh

drpenahaikan dr depansldane pensujidan

dtn\lllkan

lL

_us p.da

langgal

22Ju|2008

Abnrak

tclah disex!ur olch _nencutr:

\airiaTdeB

^utE

olabn$

ul

ft1,t"

0,.-t'""**f

(:

'd

Lru

dnVanallmln

Dr

tlar

l

\

nr

R.J,SE

Msl

llu'niui

lel.h

nendanar ke

f_qq1lqlblrglsrtas

dan ncndapar

Nom.r

Alunnus

P91!e9j!\!,lrulll!1!$ltlt!

Basically. every

corprny

always

.cqtrnc

fu'd i'r

dctia),jig

irs opDmtdnrl

actvily the

lrnd can be ohlained JioD sone

solrce

{rhj\

rr.m

insidc

olcomFnyi

olNr

eqlirl.

and retlincd camingorothersolrce (.LGjde

or'compdy)

in Lhe rbrm

of

loan

/

debr

rioh

oLLrer pa4y. Besidcs

t.d.

tnr a

:4o

p

bl jc

LonNn! ir fie

eftnn of addinS irs opemtiona adivny, tnnd crn he

obrained dnoush sale olsrock ro inve$or as

o$'er

otcapitat.

Capi6lmarker trscd b]companyas mcdia in selting irs $ock

b

pubtic The

sro*d

olcapilal

Darkcr as inve$merr apprarus

innilule

has

moneky

and economic luncrion

rhrl

flogE$ivcl'

necded by sociery as an aLteaalire

adaccun,ulaloroltl.d(HusnaD,

J99,1:

l)inRahayu(2006).Inirsecofo'nic

functioD,.apihl

markcr p.ovide5

t:lcility

ro remove tirnd

ot

/c,l"i

(pafry or

sidd

*ho!

haviie

exce$

of

fund)

ro

6,'"ysl

(fund

pmpd

paniet. uy

invesling fund thal

the)

have, lender exp.cls

lo

gcr a gain trom borowcr. Availabilny

ol

aund

liom outsidci dolivale

_{drcJr ro}

i.rei

_{wnhout havc ro}

*oitiie

tbrcohpan)\

operaii'rgtund

li

ih

financial tuncrion. capibtmarker

p.oridine

tuid wid.ur

have

to iivolvd

diEcly

h

o*ncrship.t

rcal

assr

which nccdcd ro rhat invedmeir

Fhictudion

olsi(k

suppl]

and demand toward

slek

c\chdge

such as lhe

pricc in

capib

by

rhar

pcninLir

coDpm)

has tendcnc)

io

nrarei

a bcxcr ptuspecr

in

lne

lururt

So rhri breained $ock has hlgher price t;or company. rhcerisrence

ol

incrcasirgsrock price.dsessed as beneticiatcondnjoi. bur oD

6e

orhersida

invenor claimed

io

releas

hiehc.

capihl

addirion ro

d.

inveshrent tlnough

pu,chbj,s

of

conpdys

srock.

llighe. incre$iig

ol

i.ck f.c.,

*itt

causc decEasing rcquesr

ol

'

irl

i,fiuctrc

hc

ier

pricc wh ich is

b.4ains

ir

$e

ma*cr

J

vfi.us

other issue!which is intlrrcncc .ompan! protirabiity in ihe tururc dncdL].

SrNk

pnce.l.oD,paiy

ar

ccrhin

level

cai

bccomc

lery

hien. whjch

.an

idcndfied Lom height

ases

_{caming t)ersharc (EPS). This inanercaused}

in thc cnd

cm

causc rhc eook

pri*

becone

sl4icj

Desreasine reque$can bc catrsed by more invenor

ar rhc hish price. csoeciallr

individuatitrvejor

rhar

ln

li(r,

more

iivcyou

rlm

ro buy

other..dpany

'lo

_{rvoid rpneaercc coddirion. hencc}

etton

_{lhar needs}

lo

_{bc donc by}

cohp

y

is replece $ock

pri(

ar cenain rerch. Or

jr odjf

worJ\

co,npafy

has

ro

rry

!o

desccnd

fte nock at

increnine

price.

qhich

drrRs

iave$or

cmhusi

m for huyinS.

orc

oflne

sreps ralen

b! co'npdy

in orJer

b,nake

rhar $ocks s.ld can dmqs inv.norenttrusiasm is

th.oughr/,.*rt

Mc

Coueh

and

Fma

{t991) aUimine

rh.r

rhc

rnain

objcsrive

cdnduciing stock splir

h

ro

plr

dre eock in morc popular com,nerce glrarion

lpop

zdkt

n-s.),

Ihec

ifvotving

mdy

buyc

.

Achievlbtc

aock

CIIAPTER V

CONCLUSION AND

RECOMMONDATION

Ascxplaincd in

$c

pruviouschdprcr, rheobjectiveoltheEsearch is to _Cet

cmpnical cvidcncc about

lhe

cfl4t

oa

nock split annolncenrn{

among lGted

compadies

rl

lDX.

Ii

car

be

trsd

as coisiderarion base

tu

any

pary

hjfoft

Accordins lo

$c

dala

Mallsisand

result !5at have beer explained in the

pftvious

chaptci

rhc.onclusion. rccdmmendation. imDlication and Limitarion

of

theresedhwill b€erplaincddlbllorvl

l.

Sr

k

spln

announccmenL

Nhich

is

conducred

by

sprine

up

company

lor

yea6

of

200.1-2007,

sbli$ically

give

signiiicant

dilieFnce of Darket reacrion- both belbre and alter event date.

Il!

proved

empi

calLyas

totow*

Significanr

valLeolCAAR=0.001 les

than

sigriticane

level (d

2.

Srock

spljl

announEncnr, which

is

conducrcd

by

ering

down

compmy

iir

lea6 ol

2004-2007,

n.rhtiallt

live

silnifcant

diftaErce of D&ket readion. bo$ bcforc and

.nei

cvert dare.

I

r\

provcd cm

piricallt

as lollowsl

REFERENCI:S

Agung

Nugbho,

Buono,

2001. JtrzleAr

Jtl

Menitih

Metatu Statdl,t

Pen

titit,

D.zg,r,tP.tt

Andi:

Yoalak.nd

rmiria and

Krinijrdi- 2005-,a,Elhk Kandtnso.

Inlunasi

to"

Ele\

Inia

rndBti

P?zgrn.nor

Stock

Split

padt

Petusahtaa

Ben,nh,t'

da,

p.t6thaan

TidaL

Ae

unbuh,

Jufr^l

Ek

nonidan Bkdis loloresia. VoLune20.No L

Asquirh.

Healy

Paul

and

Palepu

Krishn4

1989-

Eanihgs

ont

Stock

Sptit.

lhe

ccounring Revic$. July,

p187.

Brcnnan. M J. and T E

C.peland,lrqA,9otk

S?1i1, Stock

hices

and

Trun$dio.

C6t,

Joumal

olFinancial

Ecodomics

ll,

pp.3l-10!

llriglram, Etrgede F dnd tloves-

Plil\p

R,20A2,Iztemediate

FiMn.iut Mana|enent,jth

cdirion,Sourh-\veiem:

Thomsor

L.aning

lnc n

Copelsnd-

lhoms

E

1919.

Li|uidiq

ChanAes Fouowi,zS

Sroc4.t?/ts. rhc

Joumat

of

Finmce. March I

l5

14l

Husn.n. Suad. 1994,

Dzsa.,Dasrt

feoti

Podofutia Dad

A&tkk,Szk,,irzs

2"i

cditior,

YOEYAKAfui UPP AMIT YKPN.

lndah

(umiawati.

2003,

,,lrariis

KanlurAzn

Inlothasi

Statk Split

dtn

Liksidilt

Sohom:

Studi

Enpins

padt

Nobslnctonoc rrrdt

g.

Jumat

Rise!

AkuntMsi lndonEsi(

Vol

rt,

No,l.

Jo8iyanto. 2003.

T.oti

Ponololio

Dan

Analisk

lays.lJ4ri.

Edhi K.riea. yogla[atu: