STOCK INVESTMENT ANALYSIS: CASE IN INDONESIA STOCK EXCHANGE (IDX) (Published)
This study show the growing interest of investors to invest in Indonesia’s capital market as emerging market. Before investing, it was very important for investor to consider the risk and rate of return factors. One method used to analyze the relationship between return and risk in stock investment is the Capital Asset Pricing Model (CAPM). This study aims to analyze the CAPM method to describe the risk and stock returns, and investment options to determine the best stock in the pharmaceutical company that listed in the Indonesian Stock Exchange (IDX) period 1/1/2009-31/12/2012.The study used 8 samples of pharmaceutical companies listed in the Indonesian Stock Exchange (IDX) period 1/1/2009-31/12/2012. The sample selection was purposive sampling technique with some criteria of research necessity. Results showed there were 5 pharmaceutical companies listed in Indonesian Stock Exchange (IDX) has a beta greater than 1 (β> 1) with the highest expected rate of return, and 3 pharmaceutical company has a beta less than 1 (β <1) with the lowest expected rate of return . Furthermore, the results of the analysis of stock investment decisions that used the Capital Asset Pricing Model (CAPM) were 7 companies from 8 companies were classified as undervalued stocks, it was recommended to buy the stock, and 1 company classified as overvalued, it was recommended to sell the stock.
Keywords: CAPM, Return, beta, stock investment decision
A Comparative Study on Performance Evaluation of Pakistani Mutual Funds (Published)
This paper evaluate and compare the performance of different categories of Pakistani mutual funds, during seven year from 2004 to 2011.Mutual funds’ performance were analyzed using various evaluation techniques; Sharpe, Treyno, Jensen’s alpha, Sortino, Information/Appraisal ratio, Fama overall performance and performance attribution analysis. The findings suggest that performance of the mutual funds measured with first five methods, does not satisfy investors’ expectations based on the risk and return, mutual funds significantly under-perform the market. Those mutual funds analyzed with the last two methods, are not offering complete diversification thus managers fell short of matching expectations consistent with the actual risk level of portfolio, they have also not made active decision involving both in allocation of assets and in selection of individual security. This study facilitates the managers and investors in taking effective investment decisions by measuring the performance of funds they can allocate resources more efficiently in future.
Keywords: Investor, Mutual funds, Pakistan, Performance, Return, Risk