Financial and Non-Financial Factors: The Influences on Bonds Yield and Bonds Prices of Companies Listed on the Indonesian Stock Exchange

Abstract

Corporate bonds are a product that is quite popular with long-term investment players because they have competitive returns. During 2020-2022 bond yields and company bond prices show a fluctuating trend. These fluctuations are closely related to the financial performance of the bond issuing company and the characteristics of the bond itself. When financial performance conditions are good, bond prices rise and bond yields fall. However, many previous researchers identified differences between research results. This research addresses research gaps resulting from inconsistencies in previous studies. This research uses the independent variables CR, DAR, DER, ROA (financial factors) and bond age, bond transaction volume (non-financial factors) to test their influence on Bond Yield and Corporate Bond Prices. The total sample is 309 types of company bonds listed on the Indonesian Stock Exchange. The Grand Theory used is Signaling Theory, Demand and Supply Theory, Portfolio Theory, Liquidity Preference Theory, Bond Pricing Theory, and Duration and Convexity Theory. Panel data methodology is used because it includes cross-sectional and time-series data. By using the Sobel Test, Path Analysis is also used in the research to ascertain the indirect influence of the intervening variable, bond prices. The research results show that the Random Effect Model was selected for Structure 1, while the Fixed Effect Model was selected for Structure 2. In the results of structural regression 1, the variable has a Prob value > |t| above the significance level are DAR, DER, and Transaction Volume, while those below the significance level are CR, ROA, and Bond Age. In the results of structural regression 2, variables have a Prob value > |t| more than the significance level are DER and Transaction Volume, while those that are less than the significance level are DAR, CR, ROA, Bond Life, and Bond Price. The results of the indirect influence test showed that CR, ROA, and Bond Age had a Zcount > 1.96. The conclusion of this research is that bond prices are directly influenced by CR, ROA and bond age. Bond Yield is directly influenced by DAR, CR, ROA, Bond Life, and Bond Price. Bond Yield is indirectly influenced by CR, ROA, and Bond Life through Bond Prices. Suggestions for further research are to consider other variables, such as bond value, bond rating, bond coupon, and frequency of bond transactions, as well as the investor's risk profile.