By
Hammam Fari As’ad 11403070
BACHELOR’S DEGREE in
BUSINESS ADMINISTRATION
FACULTY OF BUSINESS AND ADMINISTRATION
SWISS GERMAN UNIVERSITY The Prominence Tower
Jalan Jalur Sutera Barat No. 15, Alam Sutera Tangerang, Banten 15143 - Indonesia
June 2020
Revision after Thesis Defense on 13th July 2020
Hammam Fari As’ad STATEMENT BY THE AUTHOR
I hereby declare that this submission is my own work and to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at any educational institution, except where due acknowledgement is made in the thesis.
Hammam Fari As’ad
_____________________________________________
Student Date
Approved by:
Margaretha Tiur Pasuria Lingga, SE., MM
_____________________________________________
Thesis Advisor Date
Dr. Nila Krisnawati Hidayat, SE., MM.
_____________________________________________
Dean Date
Hammam Fari As’ad EXAMPLE OF BACHELOR THESIS TITLE
WITH LENGTH OF TWO LINES
By
Hammam Fari Asa’ad
Margaretha Tiur Pasuria Lingga, SE., MM, Advisor
SWISS GERMAN UNIVERSITY
This research tries to study the impact of three independent variables on the stock market index in Indonesia's non-crisis period 2014-2020. The three independent variables on this research are foreign exchange rate (rupiah), gold price, inflation rate.
The dependent variable is the stock market index (IDX Composite). In 2015 Indonesia Stock Exchange persuade people to be new active investors. While during this period of research, Indonesia had some critical issues that could impact the stock market. The trade war between China and the United States, two times the presidential election, COVID-19 plague. The significant impact among the three respectively: the inflation rate, the gold price, and foreign exchange rate. Those three variables have a negative direction with the stock market. In this research, PP-Pheron applied check stationarity among the data. Classical test and multiple regression tests to find out the correlation between independent variables and dependent variables.
Keywords: stock market, foreign exchange rate, gold price, inflation rate, IDX Composite, Rupiah.
Hammam Fari As’ad
© Copyright 2020 by Hammam Fari As’ad
All rights reserved
Hammam Fari As’ad DEDICATION
I dedicate this works for the better future investment in Indonesia. And for my family and my friends who gave me support to finish this thesis.
Hammam Fari As’ad ACKNOWLEDGEMENTS
First of all, author would like to express most gratitude to Mrs. Margaretha Lingga, SE, MM for her advice, guidance, patients, critics during this thesis guidance.
Author would like to thank you for parents and friends that gave support during this thesis been made.
Hammam Fari As’ad TABLE OF CONTENTS
Page
STATEMENT BY THE AUTHOR ... 2
ABSTRACT ... 3
DEDICATION ... 5
ACKNOWLEDGEMENTS ... 6
LIST OF FIGURES ... 9
LIST OF TABLES ... 10
CHAPTER 1 - INTRODUCTION ... 11
1.1. Research Background ... 11
1. 2. Research Problem ... 18
1.3. Research Question ... 19
1.4. Research Objectives ... 19
1.5. Scope Limitation ... 20
1.6. Significance of Studies ... 20
CHAPTER 2 – LETERATUR REVIEW ... 21
2. 2. Foreign Exchange Rate ... 22
2. 3. Gold Price ... 23
2. 4. Inflation Rate ... 25
2. 5. Stock Market Index ... 27
2.5.1 Stock Price ... 28
2. 6. Foreign Exchange Rate Impact on Stock Market Index ... 29
2. 7. Gold Price Impact on Stock Market Index ... 30
2. 8. Inflation Rate Impact on Stock Market Index ... 30
2. 9. Previous Studies ... 31
2. 10. Study Differences ... 35
2. 11. Research Model ... 37
2. 12. Hypothesis ... 38
3. 1. Type Of Study ... 39
3. 2. Unit of Analysis ... 39
3. 3. Data Sources and Collection ... 40
Hammam Fari As’ad
3. 6. Data Analysis Technique ... 43
CHAPTER 4 – RESULT AND DISCUSSION ... 46
4. 1. Descriptive Statistics ... 46
4. 2. Stationarity Test ... 48
Table 4. 2 Unit Root Phillips – Perron Test ... 48
4. 3. Classical Test Assumption ... 49
4. 4. Regression Result And Hypothesis Testing ... 51
4. 5. Hypothesis Testing ... 52
4. 6. Hypothesis Discussion ... 54
CHAPTER 5 – CONCLUSION ... 58
5. 1. Conclusion ... 58
5. 2. Recommendations ... 59
GLOSSARY ... 60
REFERENCES ... 61
APPENDICES ... 68
CURRICULUM VITAE ... 73
Hammam Fari As’ad LIST OF FIGURES
Figures Page
1. Figure 1.1 Financial Literacy in Indonesia 2013 12
2. Figure 1.2 Financial Literacy in Indonesia 2016 12
3. Figure 1.3 IDX Composite And USD/IDR Growth Rate 13
4. Figure 1.4 Monthly IDX Composite and USD/IDR Chart 2014-2020 15 5. Figure 1.5 Monthly IDX Composite, Gold Price in IDR, and Inflation Rate Chart
2014 - 2020 17
6. Figure 2.1 Frame Work of Thinking 21
7 Figure 2.2 Research Model 39
Hammam Fari As’ad LIST OF TABLES
Table Page
1. Table 1.1 IDX Composite and USD/IDR Growth Rate 14
2. Table 3.1 Variables Operationalization 41
3. Table 3.2 Durbin Watson Test Interpretation 44
4. Table 4.1 Descriptive Statistics 2014 - 2019 46
5. Table 4.2 Descriptive Statistics 2014 – 2020 47
6. Table 4.3 Unit Root Test: Phillips-Perron Test 2014-2019 48
7. Table 4.4 Unit Root Test: Phillips-Perron Test 2014-2020 48
8. Table 4.5 Multicollinearity Test Result 2014-2019 49
9. Table 4.6 Multicollinearity Test Result 2014-2020 49
10. Table 4.7 Heteroskedastisity Test – Glejser Test 2014-2019 50 11. Table 4.8 Heteroskedastisity Test – Glejser Test 2014-2020 50 12. Table 4.9 Regression Result January 2014 – Desember 2019 51 13. Table 4.10 Regression Result January 2014 – Desember 2020 52
14. Table 4.11 Hypothesis Summary 54
15. Table 4.12. Variable’s Coefficient Comparison 55
16. Table 4.13 Indonesia Trade Balance 2015 – Mei 2020 55
