The Graph of Daily Stock and Market Return

Analysis

Daily stock and market return analysis

At October 8, 2008, because of the global recession, Indonesian stock market exchange fluctuates significantly in which result in decreasing value. The Aneka Tambang Tbk planned to buy back the stock from the market. They provide IDR 200 billion to do it. This issue results in decreasing of stock price, and the return rate.

At January 23, 2008, the highest return rate achieved because joint issue between Antam and Zhongjin for Herald Resources increase investor expectation to get higher return.

IHSG’s lowest price is at Rp. 850/share at 27th October 2008 this happens because of the sentiment of the downfall of Regional Stock Exchange yet in fact it is one of the effect of global recession with some domestic which is about Indover Bank. The players are still waiting for the tidings to turn in their favor that’s the reason why not too many transactions occurred that day.

IHSG’s highest price is at Rp. 4525/share at 4th January 2008 this is the top of the fluctuation that will mark the beginning of downfall of IHSG stock price since they keep on decreasing from day to day. Though, this price indicating the highest is no guarantee that the condition of the company is necessarily good.

LQ45’s lowest price is at Rp. 207/share at 28th October 2008 this is due to the global recession that happen throughout the country all over the world, Aneka Tambang Tbk is no exception for they was rammed by the tide of recession.

LQ45’s highest price is at Rp. 616/share at 9th January 2008. As the case in IHSG, the highest price was reached because of the positive response of the market at the beginning of downfall the price. But sooner they realize that the downfall will last longer than they have expected at the beginning. This is the early indication of massive effect of global recession that will be faced at the end of the year.







Calculating the average return will generate an expected return on the assets. As we can see from the table, the average from Aneka Tambang Tbk stock price is 0.01189% it mean that the investor expect to get 0.01189% return from their investment in buying the stock. For example, the investor purchased stock on May 12, 2008 at Rp 2449.34. With the expected return of 0.01189%, the price should be at least Rp 2449.81 before the investor can sell it.



Average market return of IHSG and LQ45

The table shows us the value of -0.03671% for IHSG market return and the market return for LQ45 is -0.00193%. This negative value was caused by global recession in 2008, where most of company stock prices collapsed. The average of daily market return for IHSG in 2008 is -0.44%. It means that in 2008, mostly the stock price decreased. And in 2009, the average of daily market return for IHSG is 0.18%.





Standard deviation rate

Standard deviation rate could be assumed as risk rate that an investor have by doing investment on the company. Bigger standard deviation value means bigger range of investment return rate, both positive and negative. For example, IHSG have average rate value -0.03671% and standard deviation rate 4.67034% means that the returns range mostly between -0.03671% ± 4.67034%. They could loss as big as – (0.03671% - 4.67034%) or gain at most (-0.03671% + 4.67034%) in general.

. The average return value of Aneka Tambang Tbk is 0.01189% and the standard deviation is 2.03697%. It means that the average value for return from stock in 2008 to January 2010 is 0.01189% and most of rate value distribution is 2.03697% higher or lower than the average. The positive value of average means that mostly, the investment give positive return compared to the previous day stock closing price.

Conclusion

From the data, we can conclude that this company has a good performance. While the compound index fall, this company could stand still. With the average rate of return 0.01189% is better than both compound indexes, IHSG and LQ45.

With lower risk rate (from standard deviation) compared to IHSG and LQ45, this company could be a good choice when an investor want to invest their money with low risk. But the effect of this low risk is the investor only get small rate of return compared to the other company with high standard deviation (we could see it from IHSG and LQ45 data).