The Influence of Interest Rates on the Stock Returns of Property Companies on the Indonesia Stock Exchange with Net Profit as an Intervening Variable

Abstract

This research aims to analyze the influence of interest rates on the stock returns of property companies listed on the Indonesia Stock Exchange, with net profit as an intervening variable. The sample for this study consists of 19 companies from a total of 86 property sector companies listed on the IDX, covering the period from 2019 to 2022, using purposive sampling. Data collection for this research utilizes secondary data. The analysis method used in this study is path analysis with the analytical tool SPSS. The results of the research show that interest rates have a negative but not significant impact on stock returns because high-interest rates encourage investors to invest their capital in banks for more attractive returns with lower risk. Interest rates have a positive but insignificant impact on net income because an increase in interest rates boosts interest income from investments. Net profit has a positive but not significant impact on stock returns, as although an increase in net profit provides a positive signal to investors, its effect on stock prices might be influenced by other factors such as macroeconomic conditions and company policies. The mediating effect of net profit on the relationship between interest rates and stock returns is positive but not significant because net profit is not strong enough to achieve the expected level of significance in mediating this relationship.