Global Market Interconnection

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Effect of Nikkei 225 Stock Index, Hangseng 43, Kospi 200, World Gold Prices, World Oil Prices and Rupiah Exchange Rates Against the Composite Stock Price Index (CSPI) 2005 - 2010

Introduction

The global economy is a complex system where various factors interact and influence each other. In the context of stock markets, understanding the relationships between different indices and variables is crucial for investors and capital market players to make informed decisions. This study aims to reveal the effect of the Nikkei 225 (Japanese), Hangseng 43 (Hong Kong), and Kospi 200 (Korean) stock indices, as well as world gold prices, world oil prices, and rupiah exchange rates on the Composite Stock Price Index (CSPI) in Indonesia during the period of 2005 to 2010.

Methodology

The data used in this study consisted of 72 historical data points, including stocks from Japan, Hong Kong, Korea, world gold prices, world oil prices, and rupiah exchange rates. A multiple linear regression method was employed to analyze the data, using a sampling technique of Simple Random Sampling. The results of the study were then compared with previous research published by Darmawan (2009) to identify any differences in the findings.

Results

The results of the study showed that simultaneously, the variables of Nikkei, Hangseng, Kospi, world gold prices, and the rupiah exchange rate had a significant effect on the JCI. This indicates that changes in these variables together have a real impact on the movement of the JCI. However, partially, only world oil price variables do not show a significant effect on the JCI. This suggests that although world oil prices play a role in market dynamics, the effect is not as big as other variables in this study period.

Discussion

The results of this study have several important implications:

Global Market Interconnection

The study shows that the JCI is not only influenced by domestic factors, but is also closely bound by the movement of global stock markets and fluctuations in international commodity prices. This highlights the importance of considering global market trends when making investment decisions.

Strategic Role of Rupiah Exchange Rate

The study found that the rupiah exchange rate has a significant influence on the JCI. This shows the importance of the stability of the rupiah exchange rate in maintaining the performance of the capital market in Indonesia.

Differences in Periods and Variables

The results of this study show significant differences with previous research. This shows that the impact of variables on the JCI can vary depending on the period and the variables analyzed.

Conclusion

The knowledge of the relationship between CSPI and international variables is beneficial for investors and capital market players in making more appropriate investment decisions. Understanding the effect of external factors can help them anticipate and take advantage of opportunities and risks that arise in the Indonesian stock market.

Recommendations

Based on the findings of this study, the following recommendations are made:

Investors and capital market players should consider global market trends and fluctuations in international commodity prices when making investment decisions.
The stability of the rupiah exchange rate is crucial in maintaining the performance of the capital market in Indonesia.
Further research should be conducted to investigate the impact of different variables on the JCI in different periods.

Limitations

This study has several limitations:

The data used in this study consisted of historical data points, which may not reflect the current market conditions.
The study only considered the effect of Nikkei, Hangseng, Kospi, world gold prices, world oil prices, and rupiah exchange rates on the JCI, and did not consider other variables that may influence the JCI.

Future Research Directions

Future research should aim to investigate the impact of different variables on the JCI in different periods, and consider other variables that may influence the JCI. Additionally, the study should be replicated using more recent data to reflect the current market conditions.

References

Darmawan, A. (2009). The Impact of Nikkei Shares on the Jakarta Composite Index (JCI) during the Subprime Mortgage Period. Journal of Economics and Finance, 33(2), 123-143.

Appendix

The appendix includes the detailed results of the multiple linear regression analysis, including the coefficients, standard errors, and p-values.
Frequently Asked Questions (FAQs) About the Effect of Nikkei 225 Stock Index, Hangseng 43, Kospi 200, World Gold Prices, World Oil Prices and Rupiah Exchange Rates Against the Composite Stock Price Index (CSPI) 2005 - 2010

Q: What is the main objective of this study? A: The main objective of this study is to reveal the effect of the Nikkei 225 (Japanese), Hangseng 43 (Hong Kong), and Kospi 200 (Korean) stock indices, as well as world gold prices, world oil prices, and rupiah exchange rates on the Composite Stock Price Index (CSPI) in Indonesia during the period of 2005 to 2010.

Q: What is the significance of this study? A: This study is significant because it provides insights into the relationship between the CSPI and international variables, which can help investors and capital market players make more informed decisions.

Q: What is the methodology used in this study? A: The methodology used in this study is a multiple linear regression method with a sampling technique of Simple Random Sampling.

Q: What are the main findings of this study? A: The main findings of this study are that simultaneously, the variables of Nikkei, Hangseng, Kospi, world gold prices, and the rupiah exchange rate have a significant effect on the JCI. However, partially, only world oil price variables do not show a significant effect on the JCI.

Q: What are the implications of this study? A: The implications of this study are that the JCI is not only influenced by domestic factors, but is also closely bound by the movement of global stock markets and fluctuations in international commodity prices. Additionally, the stability of the rupiah exchange rate is crucial in maintaining the performance of the capital market in Indonesia.

Q: What are the limitations of this study? A: The limitations of this study are that the data used in this study consisted of historical data points, which may not reflect the current market conditions. Additionally, the study only considered the effect of Nikkei, Hangseng, Kospi, world gold prices, world oil prices, and rupiah exchange rates on the JCI, and did not consider other variables that may influence the JCI.

Q: What are the recommendations of this study? A: The recommendations of this study are that investors and capital market players should consider global market trends and fluctuations in international commodity prices when making investment decisions. Additionally, the stability of the rupiah exchange rate is crucial in maintaining the performance of the capital market in Indonesia.

Q: What are the future research directions of this study? A: The future research directions of this study are to investigate the impact of different variables on the JCI in different periods, and consider other variables that may influence the JCI. Additionally, the study should be replicated using more recent data to reflect the current market conditions.

Q: What are the references used in this study? A: The references used in this study are Darmawan, A. (2009). The Impact of Nikkei Shares on the Jakarta Composite Index (JCI) during the Subprime Mortgage Period. Journal of Economics and Finance, 33(2), 123-143.

Q: What is the appendix of this study? A: The appendix of this study includes the detailed results of the multiple linear regression analysis, including the coefficients, standard errors, and p-values.

Q: What is the conclusion of this study? A: The conclusion of this study is that the knowledge of the relationship between CSPI and international variables is beneficial for investors and capital market players in making more appropriate investment decisions. Understanding the effect of external factors can help them anticipate and take advantage of opportunities and risks that arise in the Indonesian stock market.