scholarly journals The Effect of Hedging with Financial Derivatives on Firm Value at Indonesia Stock Exchange

2019 ◽  
Vol 65 (1) ◽  
pp. 20
Author(s):  
Budi Frensidy ◽  
Tasya Indah Mardhaniaty
Keyword(s):  
Interest Rate ◽  
Firm Value ◽  
Foreign Currency ◽  
Stock Exchange ◽  
Commodity Price ◽  
Financial Derivatives ◽  
Price Risk ◽  
Financial Risks ◽  
Positive Relation ◽  
Derivative Instruments

This study aims to analyze the effect of hedging for the risks of foreign currency, interest rate, and commodity price on firm value as measured by Tobin’s Q. The findings reveal that hedging with derivative instruments is insignificantly related to firm value but significantly varied in financial risks. Hedging for foreign currency risk has a significantly positive relation to firm value, while hedging for interest rate and commodity price risk has no relation. Furthermore, this study provides a novelty compared to previous studies in the utilization of the extent of hedging as the variable to measure the implementation of hedging.

scholarly journals The effect of hedging exchange rate risk, interest rate risk and commodity price risk with derivative instruments on firm value

2021 ◽  
pp. 1707-1714
Author(s):  
Nadhifah Almas ◽  
Chandra Wijaya ◽  
Fibria Indriati ◽  
Sekar Anindyaswari
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Interest Rates ◽  
Firm Value ◽  
Commodity Price ◽  
Interest Rate Risk ◽  
Price Risk ◽  
Exchange Rate Risk ◽  
Rate Risk ◽  
Derivative Instruments

The purpose of this paper is to analyze the effects of firm value on hedging for exchange rates, interest rates and commodity price risks using derivative instruments as well as examining different types of derivative instruments, including forward contract, future contract, option contract, and swap contract, used as hedging instruments to assess their various effects on firm value. The proxy used for the firm value variable is Tobin’s Q, and the ordinary least squares regression is employed for the research method. The study used 348 records from non-financial companies listed on the Indonesia Stock Exchange over the period 2015–2018. There are different results. First of all, the use of hedging for exchange rate risk with derivative instruments has a positive and significant effect on firm value. Secondly, the use of hedging for interest rate risk with derivative instruments has a negative but not significant effect on firm value. In addition, the use of hedging for commodity price risk with derivative instruments has a positive but not significant effect on firm value. Moreover, the effects from hedging using derivative contracts in general on firm value does not give results that are different from the use of hedging risk for exchange rates, interest rates and commodity prices with derivative instruments.

scholarly journals THE DETERMINANTS OF HEDGING AND FIRM VALUE: An Empirical Study in Mining Companies Listed on Indonesia Stock Exchange

2018 ◽  
pp. 104
Author(s):  
Garnis Irawanti
Keyword(s):  
Logistic Regression ◽  
Empirical Study ◽  
Financial Distress ◽  
Firm Value ◽  
Stock Exchange ◽  
T Test ◽  
Corporate Hedging ◽  
Determinant Factors ◽  
Mining Companies ◽  
Derivative Instruments

<p class="Keywords">This study aims to determine the determinant factors in the company's hedging decisions and to determine whether the activities of corporate hedging decisions through derivative instruments provide increased value for the company. The sample consisted of 33 mining companies listed on Indonesia Stock Exchange during 2011-2015 period. The method used in this study is logistic regression and independent sample t-test. The result of logistic regression by using variable of financial distress, underinvestment cost, and size showed a positive correlation to corporate hedging decision. Meanwhile, by using an independent sample t-test found that the company's hedging decisions significantly affect the value of firms and the companies with hedging decision activity through derivative instruments have more superior value than companies by using natural hedging decisions.</p><p> </p>

scholarly journals FAKTOR-FAKTOR YANG MEMPENGARUHI AKTIVITAS HEDGING DENGAN INSTRUMEN DERIVATIF VALUTA ASING

2015 ◽  
Vol 5 (1) ◽  
Author(s):  
Fay Guniarti
Keyword(s):  
Logistic Regression ◽  
Firm Size ◽  
Financial Distress ◽  
Firm Value ◽  
Foreign Currency ◽  
Stock Exchange ◽  
Secondary Data ◽  
Analysis Model ◽  
Growth Opportunity ◽  
Probability Prediction

<p>Penelitian ini bertujuan untuk mengetahui faktor-faktor yang mempengaruhi aktivitas hedging dengan instrumen derivatif valuta asing pada perusahaan non keuangan yang terdaftar di BEI tahun 2010-2012. Data yang digunakan adalah<br />data sekunder yang diunduh dari website Bursa Efek Indonesia. Populasi dalam penelitian ini adalah seluruh perusahaan yang terdaftar di Bursa Efek Indonesia tahun 2010-2012. Sedangkan sampel penelitian ini sejumlah 77 perusahaan yang memiliki eksposur transaksi dan memiliki kelengkapan data untuk diteliti. Dari sampel tersebut sebanyak 28 perusahaan melakukan aktivitas hedging selama periode pengamatan dan 49 perusahaan tidak melakukan aktivitas hedging.Analisis Logistic Regression digunakan untuk menguji hipotesis. Hasil pengujian menunjukkan bahwa model analisis menghasilkan ketepatan 79.2% dan variabel leverage, liquidity, firm size dan financial distress berpengaruh signifikan terhadap prediksi probabilitas aktivitas hedging dengan tingkat signifikansi 5%, sedangkan variabel firm value dan growth opportunity berpengaruh tidak signifikan.</p><p> </p><p>The objective of the study was to know the factors which influence the hedging activity with foreign currency derivative instruments at non-financial companies listed on the Indonesia Stock Exchange in 2010-2012. The data of the research were secondary data which was downloaded from the Indonesia Stock Exchange website. The population of the study was all companies listed in Indonesia Stock Exchange in the period of 2010-2012. There were 77 companies which had the transaction exposure andcomplete data for analysis. From those samples, only 28 companies did hedging activities during the period of observation and 49 companies did not do hedging activities.The data were analyzed by Logistic Regression Analysis to test the hypothesis. The test result showed that analysis model gave the accuracy 79.2% and the research variables; leverage, liquidity, firm size, and financial distress significantly influenced the probability prediction of hedging activity with 5% level of significancy, while the research variables; firm value and growth opportunity did not give significant influence.</p>

scholarly journals Use of Derivative and Firm Performance: Evidence from the Chinese Shenzhen Stock Exchange

2021 ◽  
Vol 14 (2) ◽  
pp. 83
Author(s):  
Yantao Wen ◽  
Yuanfei Kang ◽  
Yafeng Qin ◽  
Jeffrey C. Kennedy
Keyword(s):  
Firm Performance ◽  
Performance Improvement ◽  
Stock Exchange ◽  
Financial Derivatives ◽  
Financial Risks ◽  
Firm Level ◽  
Listed Firms ◽  
Tax Shield ◽  
Negative Effect ◽  
Research Findings

Financial derivatives have been increasingly used by firms to hedge against financial risks. However, it is still not clear what factors at the firm level lead to firms’ derivative use and whether derivative use can generate performance improvement, especially in the context of firms operating in emerging economies. Using the unbalanced panel data consisting of 2529 listed firms from China covering an 11-year period from 2005 to 2015, this study examines these two questions regarding firms’ use of financial derivatives. Based on results from the empirical analysis, this study identified operational cash flow, tax shield, R&D investment, and the possibility of bankruptcy, as the firm-level factors that enable firms’ decision to invest in financial derivatives. More importantly, empirical findings from this study suggest that a firm’s derivative use tends to negatively affect firm performance, rather than improve firm performance. The negative effect of derivative use on firm performance is not consistent between the two groups of the better performer and poorer performer firms. While the poorly performed firms are more likely to use financial derivatives for the purpose of performance improvement, their derivative use tends to further damage, rather than improve, performance. These research findings have theoretical and practical implications.

scholarly journals ANALISIS FAKTOR YANG MEMPENGARUHI PENGAMBILAN KEPUTUSAN HEDGING MENGGUNAKAN INSTRUMEN DERIVATIF VALUTA ASING

account ◽  
2019 ◽  
Vol 6 (1) ◽  
Author(s):  
Vincentia Ayuningtyas ◽  
Sabar Warsini ◽  
Elly Mirati
Keyword(s):  
Financial Distress ◽  
Foreign Currency ◽  
Stock Exchange ◽  
Secondary Data ◽  
Foreign Exchange Risk ◽  
Risk Hedging ◽  
Growth Opportunity ◽  
Derivative Instruments ◽  
Exchange Risk ◽  
Research Period

ABSTRACT  This research aims at knowing factors that influences the hedging decision withforeign currency derivative instruments. This research uses the sample from non-financialcompanies listed on Indonesia Stock Exchange in the periode of 2013-2017. The data used inthis research are secondary data taken from Indonesia Stock Exchange and the analyzedcompany's websites. The samples from the analyzed company are taken using the purposivesampling method. Based on the selected samples, there were 35 companies which did thehedging activity during the research period and have the data to be analyzed. The model wasanalysed  by using logistics regression. The result of the research shows that leverage,liquidity and growth opportunity have positive and significant factore that influence hedgingdecision with the foreign currencies by using derivative instrument, However, financialdistress has negative and significant influances while fluctuation of exchange rate did notsignificantly influence it.  Keywords: derivative instrument, foreign currency, foreign exchange risk, hedging, risk management ABSTRAK Penelitian ini bertujuan untuk mengetahui bagaimana pengaruh pengambilankeputusan hedging menggunakan instrumen derivatif valuta asing. Penelitian inimenggunakan sampel perusahaan non keuangan yang terdaftar di BEI tahun 2013-2017.Data yang digunakan dalam penelitian ini adalah data sekunder yang diunduh dari websiteBursa Efek Indonesia dan website perusahaan yang diteliti. Sampel perusahaan dipilihmenggunakan metode purposive sampling. Hasil dari seleksi sampel memperoleh 35perusahaan yang melakukan aktivitas hedging selama periode penelitian dan memilikikelengkapan data untuk diteliti. Analisis model penelitian menggunakan analisis regresilogistik. Hasil pengujian menunjukkan ketepatan klasifikasi model analisis sebesar 80,6%.Hasil penelitian menunjukkan bahwa variabel leverage, likuiditas, growth opportunityberpengaruh positif signifikan dan variabel financial distress berpengaruh negatif signifikan,sedangkan variabel fluktuasi nilai tukar berpengaruh tidak signifikan terhadap prosespengambilan keputusan hedging menggunakan instrumen derivatif valuta asing. Kata Kunci: hedging, instrumen derivatif, manajemen risiko, risiko nilai tukar, valuta asing

scholarly journals Pengaruh Rasio Kas, Working Capital TurnOver, Solvabilitas, Tingkat Suku Bunga terhadap Profitabilitas

2019 ◽  
Vol 2 (2) ◽  
pp. 182-198
Author(s):  
Siska Krisjayanti ◽  
Siti Tiffanny Guci ◽  
Erick Erick
Keyword(s):  
Interest Rate ◽  
Data Collection ◽  
Interest Rates ◽  
Firm Value ◽  
Research Method ◽  
Stock Exchange ◽  
Empirical Studies ◽  
Secondary Data ◽  
Study Data ◽  
Working Capital

The purpose of this study was to test and diagnose the effect of cash ratios, working capital turnover, solvency, interest rates on profitability (Emprising studies on various industries listed on the Indonesia Stock Exchange. The theory used in this study was the theories of Cash Ratio, Working Capital Turnover, Solvency, Interest Rate.The research method used is descriptive quantitative, this research is causal / clausal.In this study, data collection was carried out through documentation studies.The study used types and secondary data sources.The results of this study were the Cash Ratio, Working Capital Turnover, Solvency, Interest Rate, simultaneously have a not positive and significant effect on the firm value of empirical studies on Various Industries listed on the Stock Exchange for the period 2013-2016. The conclusions in this study are Cash Ratio, Working Capital Turnover, Solvency and Interest Rates are partially  taxed not positive and significant spirit towards the value of empirical studies on Various Industries listed on the IDX  for the period 2013-2016

scholarly journals The Characteristics Of Users Derivative Company Towards The Company’s Value

2019 ◽  
Vol 23 (1) ◽  
pp. 61
Author(s):  
Margarita Ekadjaja, Henny, Agustin Ekadjaja
Keyword(s):  
Firm Value ◽  
Financial Risk ◽  
Capital Expenditure ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Stock Index ◽  
Company Value ◽  
Derivative Instruments ◽  
Negative Effect

The use of derivative instruments can be used to control financial risk to be able to drive an increase in company value. The contribution of this study is to seek the relationship between variables that can increase company value, then increasing the value of the company can achieve the company's goal of increasing shareholder prosperity. The population in this study are all companies listed in the Sharia Stock Index on the Indonesia Stock Exchange in 2014-2016. Multiple linear regression analysis is used to test the hypothesis. The result of the test showed that the Return On Asset and firm size variables have a significant positive effect on the firm value of derivative users. While capital expenditure and dividend yield showed that there is no significant effect on firm value and the leverage variable showed a significant negative effect on firm value.

Part III Regulation of Financial Products, 8 Financial Derivatives

2016 ◽  
Author(s):  
Arner Douglas W ◽  
Hsu Berry FC ◽  
Goo Say H ◽  
Johnstone Syren ◽  
Lejot Paul ◽  
...  
Keyword(s):  
Financial Regulation ◽  
Stock Exchange ◽  
Financial Derivatives ◽  
Risk Transfer ◽  
Financial Products ◽  
Derivative Instruments ◽  
Credit Risk Transfer ◽  
Financial Derivative ◽  
Market Practice ◽  
Derivative Market

This chapter examines the financial derivative instruments traded and used in Hong Kong. The chapter describes the current main types of financial derivatives, their uses and risks, and examines Hong Kong’s twofold approach to their regulation. It also raises questions that may not be fully addressed in any major financial jurisdiction; for example, how the law accounts for relatively new, sophisticated contracts, especially in relation to user protection; whether related areas of law such as bankruptcy may conflict with what has become customary derivative market practice; and how credit risk transfer facilitated by derivative instruments may conflict with established precepts of financial regulation. Lastly, it considers whether links between the territory’s regulators and the stock exchange are well-suited to the supervision of certain derivative activity and to investor protection.

scholarly journals Survey on the Use of Derivatives in Indonesia

2010 ◽  
Vol 12 (3) ◽  
pp. 295
Author(s):  
I Wayan Nuka Lantara
Keyword(s):  
Small Firms ◽  
Foreign Currency ◽  
Stock Exchange ◽  
Participation Rate ◽  
Developed Countries ◽  
Interest Rate Risk ◽  
Risk Exposure ◽  
Financial Risks ◽  
Chi Square ◽  
Effect Hypothesis

This paper provides survey evidence on the use of derivatives among firms listed on the Indonesian Stock Exchange. The finding shows that the participation rate in the use of derivatives is 28.8 percent, much lower than those found in developed countries. For the derivatives non-users, insignificant risk exposure is reported as the most important rationale for not using derivatives. Consumer goods industry constitutes the largest proportion of firms using derivatives. The majority of respondents utilize derivatives to hedge against financial risks rather than to speculate. Foreign currency risk and interest rate risk are the most important types of risks faced with by respondents. Using the Chi-square and the Fisher’s exact tests, the result corroborates the size effect hypothesis, where the use of derivatives is more popular among large firms than small firms. A SURVEY ON THE USE OF DERIVATIVES IN INDONESIAKeywords: derivatives; hedging; risk management

scholarly journals Do Derivatives Instruments Ownership Decrease Firm Value in Indonesia?

2020 ◽  
Vol 5 (1) ◽  
pp. 1-9
Author(s):  
Amrie Firmansyah ◽  
Eko Bayu Dian Purnama
Keyword(s):  
Firm Value ◽  
Stock Price ◽  
Quantitative Research ◽  
Stock Exchange ◽  
Sample Selection ◽  
Secondary Data ◽  
Financial Statements ◽  
Annual Reports ◽  
Linear Regression Models ◽  
Derivative Instruments

This research aims to examine the association between derivatives instruments and firm value. This research is quantitative research with multiple linear regression models and panel data. The sample employed in this research is non-financial companies listed on the Indonesia Stock Exchange (IDX). The type of data used in this study is secondary data sourced from financial statements, stock price information, and annual reports from 2012 to 2017. The sample selection using a purposive sampling method with the number of samples amounted to 246 firm-year. The result of this study suggests that a derivatives instrument is not associated with firm value. Investors in Indonesia do not consider ownership of derivative instruments by companies whether those are harmful of not for the investment impact. Also, derivatives do not have an official market in Indonesia as well as investors also do not understand the purpose of derivative ownership by companies.

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