THE IMPACT OF INDONESIA’S MACROECONOMIC FACTORS ON THE MOVEMENT OF MANUFACTURING SUB-SECTOR INDEX (MISCELLANEOUS INDUSTRY) PERIOD 2010 – 2014

Abstract

It is expected for manufacturing companies listed in IDX to get a significant increase in income, maintain stable cash flow and increasing their share value in order to attract more investors to invest in their companies. These expectations are related to macroeconomic factors in Indonesia. Purpose of this research is to find the impact of Indonesian macroeconomic factors on the movement of manufacturing sub–sector index. Sample data is taken from 2010-2014. Macroeconomic factors will be represented by inflation rate, exchange rate in USD, and money supply (M2). Manufacturing sub–sector index will be represented by miscellaneous industry sector index. Total data is 60 for each variable. The method used to test the hypothesis is Multiple Regression Linear with SPSS 20 as statistical tool. Result shows that Miscellaneous Sector index has significant impact with exchange rate in USD and money supply (M2) and there is no significant with inflation rate. This result is due to the unstable economy condition of Indonesia. Depreciation value of IDR affects the expected stock return and increasing in money supply affects public buying power decision. Reason behind there is no significant in inflation rate could be because of most investors in Indonesia tend to invest in short term and use technical analysis based on previous stock price rather than using macroeconomic information as reference.