The effect of camels on the growth of bank stock prices listed on the Indonesian Stock Exchange
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Muh. Fauzan Arlan(1*)
Program Studi Manajemen, Fakultas Ekonomi dan Bisnis, Universitas Trisakti
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Farah Margaretha Leon(2)
Program Studi Manajemen, Fakultas Ekonomi dan Bisnis, Universitas Trisakti
(*) Corresponding Author
Abstract
The purpose of this study is to investigate how the stock price growth of banks listed on the Indonesia Stock Exchange (IDX) is impacted by the CAMELS components (capital adequacy ratio, non-performing assets, current and savings account ratio, return on capital employed, net interest margin, and liquid assets to total assets), leverage as a novel variable, and bank size as a control variable between 2020 and 2024. Purposive sampling produced 160 observations from the 32 banks that made up the research sample. In order to address heteroscedasticity, autocorrelation, and cross-sectional dependence, the analysis used panel data regression utilizing the Random Effects Model technique using EViews 0.9 software, along with diagnostic tests. The findings show that while the net interest margin has a large negative impact on stock price growth, the capital adequacy ratio and the current and savings account ratio have a positive and considerable impact. In the meanwhile, there is no discernible impact from non-performing assets, return on capital employed, liquid assets relative to total assets, or bank size. Furthermore, it has been discovered that leverage significantly and favourably affects the growth of stock prices. These results imply that while evaluating the prospects of banking stocks, investors should pay particular attention to solid capitalization, effective funding through low-cost deposits, and the efficient use of leverage. On the other hand, as they can point to underlying issues that could have a detrimental impact on market valuations, increases in net interest margins should be closely watching. The study's practical ramifications include suggestions for financial managers on how to best balance leverage levels, low-cost funding management, and capitalization measures. Investors are also urged to take these signs into account when choosing which investments to make.
Keywords: Bank Size; Capital Adequacy Ratio; Current and Saving Account Ratio; Leverage; Liquid Asset to Total Asset; Net Interest Margin; Non Performing Asset; Return on Capital Employed
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