The Performance of Stock and the Indicators

Abstract

Abstract-Performance of a company usually reflects its stock price. Companies with a good performance supposedly will have a good demand on its stock, hence boost the price and vice versa. However, there's manipulation game in the market. Rumors, speculation and short-selling are among the manipulation activities that affect the fluctuation of stock price. Fundamental analysis could provide an accurate result on companies' performance which not only base on the company's stock price. This research been conducted to study the relationship of historical performance of selected Islamic banks towards their stock performance and to identify the most significant independent variable. This research is a fundamental analysis, hence financial ratios been used as the main tool to produce data of dependent and independent variables. The research been conducted on licensed Islamic Banks in Malaysia as listed by Bank Negara Malaysia and focus on three independent variables of profitability, efficiency and liquidity and to see their relationship towards the dependent variable of the bank's stock performance. A set of quarterly data from year 2007 to 2012 been used in conducting ratio analysis. The result been further analyse using STATA 10.1 software. This research provides result on significant and relationship direction of profitability, efficiency and liquidity towards the banks stock performance. It also proves the most significant independent variable which has the strongest impact towards the stock performance.

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