THE INFLUENCE OF INTEREST RATES AND INFLATION ON STOCK RETURNS IN FOOD AND BEVERAGE INDUSTRY SUB-SECTOR COMPANIES

Abstract

This research aims to analyze the influence of Interest Rates and Inflation on Stock Returns in Manufacturing Companies listed on the Indonesia Stock Exchange (IDX) for the period 2018 - 2022. In this study, secondary data and panel data regression analysis methods were used to obtain a comprehensive understanding of the relationship between one variable and another. The sample consisted of 17 companies that published complete financial reports for 5 years (2018-2022) and were selected through purposive sampling, resulting in the analysis of 85 data points. Out of these 85 data points, a Panel Data Regression using Pooled Least Square was conducted.

The research results show that, individually, the variables Interest Rates and Inflation do not significantly affect Stock Returns. This indicates that changes in Interest Rates and Inflation do not significantly impact the performance of a company's Stock Returns. However, when both variables were analyzed together, the results indicate that Interest Rates and Inflation, when considered together, also do not significantly affect Stock Returns. This is supported by an R² value of 2.2%, which indicates that interest rates and inflation explain only a small portion of the variation in a company's stock returns.