| Summary: | Stock return of certain firm, can be affected by many factors, both internal
and external factors. Internal factors such as financial performance and size can be
crucial for the stock return in order to yield high return. On the other hand,
external factors such as macroeconomic condition and on more specific scope, the
industry where the firm is competing can also affecting stock return. Profitability
is an essential thing that have to be considered for investors, as well as the
industry return where the firm competes.
The study is trying to answer about the significance relationship between
the return of the industry (industry return) and stock return, and how far did the
relative profitability of firms moderating the relationship. Data were collected
from Indonesia Stock Exchange (IDX) from 2009-2011 on 9 industry sectors. The
findings conclude that there is a significant relationship between industry return
and the stock return of certain firms, which partially moderated by the relative
profitability of those firms. Thus, the results of the study shows that both industry
return and relative profitability should be carefully considered by future investor.
|
|---|