CAMEL RATIO ANALYSIS OF BANKING SECTOR SHARE PRICE IN INDONESIA STOCK EXCHANGE

Abstract

This study was conducted to analyze the influence of the CAMEL ratio (CAR, NPL, ROA, ROE NIM, OE, and LDR) on the stock price of the banks listed on the Indonesia Stock Exchange from 2005 to 2014. Management aspect is not included within the scope because of the limited data. This study uses the ratios that represent Capital, Assets, Earnings, and Liquidity. The conclusion of this research shows that R-Square = 0.567, which means 56.7% of the shares' prices from 11 banks can be explained by the independent variables. CAR and stock price are positively correlated. NPL and stock price are negatively correlated. ROA and stock price are negatively correlated. ROE and stock price are positively correlated. NIM and stock price are negatively correlated. Operating Expenses and stock price are negatively correlated. LDR and stock price are negatively correlated. Overall, there are three independent variables which are significantly correlated with the stock price based on 110 research data, namely: 1). LDR is negatively correlated with stock price, 2). NIM is positively correlated with the stock price, 3). ROA is positively correlated with stock price.