INVESTOR’S REACTION TOWARD EXCHANGE RATE IMPACT ON INDONESIAN MANUFACTUING COMPANY

Abstract

The aim of this study is to analyze investor reaction toward the impact of exchange rate fluctuation on Indonesian manufacturing multinational company (MNC) and domestic company (DC). There are two hypothesis developed with simple linear regression as the statistic formula to test the hypothesis. Research methodology used are descriptive method. The object of the study companies listed in manufacturing sector in 2010 Indonesia stock exchange, with  export less than ten percent classified as DC and more than ten percent classified as MNC. The empirical result find that the exchange rate fluctuation negatively significantly affects the stock price of MNC but does not affect DC.