The effect of Price Earnings Ratio (PER) and institutional ownership on stock returns of LQ45 stocks in Indonesia stock exchange

Salsa Andiani, Budi Frensidy

Research output: Contribution to journalArticlepeer-review

Abstract

The purpose of this study is to examine the effect of price earnings ratio (PER) and institutional ownership on stock returns. Stock returns are proxied by actual stock returns and abnormal stock returns. The samples used in this study are LQ45 stocks in Indonesia Stock Exchange from 2008 to 2013. The results show that PER has negative relationship with stock returns. Low price-earnings-ratio stocks outperform stocks with high price- earnings-ratio. Besides, this study shows that institutional ownership has no significant relationship with stock returns.

Original languageEnglish
Pages (from-to)177-191
Number of pages15
JournalInternational Journal of Economic Research
Volume14
Issue number15
Publication statusPublished - 1 Jan 2017

Keywords

  • Abnormal stock returns.
  • Institutional ownership
  • Ownership structure
  • Price earnings ratio
  • Stock returns

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