The Impact of Macroeconomic, Financial Performance, Market Return, and Covid-19 Instances on Stock Return of Pharmaceutical Companies

Widjaja, Weki and Sembel, Roy and Malau, Melinda (2023) The Impact of Macroeconomic, Financial Performance, Market Return, and Covid-19 Instances on Stock Return of Pharmaceutical Companies. South East Asia Journal of Contemporary Business, Economics and Law, 28 (3). pp. 48-57. ISSN 2289-1560

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Abstract

One of the most important considerations for investors when making an investment was the stock return. However, some publicly traded pharmaceutical companies in Indonesia saw poor stock returns while others saw positive stock returns. Stocks return were influenced by many factors, previous researches found different conclusions on factors influencing stocks return. There were also limited number of study on the effect of Market Return and COVID-19 on stock returns of pharmaceutical companies. Therefore the objective of this study was to examine the impact of macroeconomic, financial performance, market return, and COVID-19 instances on the stocks return of publicly listed pharmaceutical companies. The independent variables of this study were inflation, Return on Equity (ROE), Current Ratio (CR), Total Asset Turn-over (TATO), Deb-to-Equity Ratio (DER), Market Return (MR), and COVID-19 Instances while Stocks Return was the dependent variable. The effects of independent variables on the dependent variable were examined using the statistic t-Test. Statistic testing method was done using statistic software EVIEWS and SPSS. Based on the testing on factors influencing stocks return of publicly traded pharmaceutical companies in Indonesia, this study found: 1) inflation had negative impact on stocks return, 2) ROE had no impact on stocks return, 3) CR had positive impact on Stock Return, 4) TATO had positive impact on Stock Return, 5) DER had no impact on Stock Return, 6) MR had positive impact on Stock Return, and 7) COVID-19 instances had negative impact on stocks return. This study demonstrated that the Efficient Market Hypothesis, Capital Asset Pricing Model, and Signaling Theory were still applicable. Managers should manage working capital and assets properly, investors should appropriately analyze Inflation, Market Return, COVID-19 instances, CR and TATO and Government should wisely manage inflation and prevent more infection of COVID-19. Keywords: Inflation, Return on Equity, Current Ratio, Total Assets Turn-over, Debt-to-Equity Ratio

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