




































83 

 

Finance, Accounting and Business Analysis 
Volume 2 Issue 2, 2020 

http://faba.bg 

 

Analysis of Stock Split Volatility in Stock Price on  Indonesia Sharia 

Stock Index  

 
Femei Purnamasari, Miftahul Jannah, M. Ridhanoyudistira 

  
Universitas Islam Negeri Raden Intan Lampung, Indonesia 

Info Articles  
 

Abstract 

History Article: 

Submitted 23 January 2020 

Revised 4 March 2020 
Accepted 17 May 2020 

 Stock split is a stock price, tock liquidity is influenced by high low stock prices, then 

the stock split is the right action to maintain stock liquidity so that the price 
becomes small and fluitive(Kurniawati, 2013). Stock price splitting is an event rarely 
performed by issuers.Currently, issuers carrying out stock split activities are still 
relatively few because basically stock split is only done by companies that have high 
share prices. If the performance of the company is good, the share price will be high, 
but if the stock price continues to rise, it will cause a decrease in investor interest to 

buy the company's shares due to high stock prices. This study aims to determine 
whether there is a stock price movement when the company is doing a stock split 
and to find out whether research on stock price movements caused by stock split is 
following signaling theory and trading range theory. Fluitive stock prices that are 
affected by stock split can be seen by calculating the abnormal return of the 
company's close price.If the result of the calculation has a negative effect then the 

stock split does not have a good effect on stock price liquidity but if it has a positive 
effect then the stock split gives a positive effect on stock price liquidity.This is what 

influencing researchers to conduct research in Indonesian Syariah Stock Index 
because there is still little research on stock split event in Islamic stock market. This 
study analyzes the movement of stock prices for 60 days, with following day 

calculation, 30 (thirty) days before the stock split, and 30 (thirty) days after the stock 
split. This study uses secondary data, namely data from reports of companies that 
have carried out a corporate action stock split and obtained data through the official 
website www.idx.co.id andwww.finance.yahoo.com. The researcherusescloseprice 
data ofdailystockpricesfromcompaniesthatmakestockpricesplitsandbecomepartof 
2018 Syariah Indonesia stockindex. The independentvariable in this study 

isthestocksplitandthedependentvariableofthis study isthestock price. 10 
companypopulations were used in this study, and its testing wasonlyconductedon 7 
samplecompaniesthatmetthecriteriaaccordingtothepurposive sampling method. In 

analyzing data the researcher used abnormal returnanalysiswiththeactualreturn-
expectedreturn method. ThenormalitytestusedisKolmogorov Smirnovtest. 
Hypothesis testing usedone-sample t-testandpairedsamples t-test, 

theauthor'sprocessthisresearch data usingthe program SPSS 18(Yustisia, 2018). The 
final results of the test using paired sample t-test showed a very significant value that 
is 0.039 and smaller thanα= 0.05 which means there is a movement in stock prices 

for 30 (thirty) days before the stock split and 30 (thirty) days after the stock split, so 

this study concludes that the movement of sharia stock prices at ISSI 2018 is 
affected by the stock splitting event indicated by the results significant paired sample 
t-test. In the perspective of Signaling Theory and Trading Range Theory of 7 
companies that conduct stock split, the results shown by this study are following 
both theories, namely, when a company does a stock split, the stock market shows 
the existence of stock fluctuations, both before the split event and after the split 

event The results of the calculation of the actual return of 5 companies experienced 
good liquidity, while 2 companies experienced liquidity, but not so fluitive.  

Keywords:  
Stock split, signaling theory, 
trading range theory, abnormal 
returns, stock prices 
 

 

  

   

Address Correspondence:   
E-mail: femeipurnamasari@radenintan.ac.id 
 

 

 

  



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84 
 

INTRODUCTION 

 
Indonesia Stock Exchange (2019) currently has 399 companies listed on Indonesian Sharia Stock 

Index (ISSI) in 2018, and only 7 (seven) companies have carried out corporate actions in the form of a 

stock split within 1 (one) period year. The company's expectation when conducting a corporate action 

stock split is to attract investors so that it is expected to have a positive effect on the liquidity of the 
company's shares. According to(Mashdurohatun, 2011) in the world of conventional investment and 

sharia investment, the increase in share prices is usually influenced by market reactions such as demand 

and supply, but if the stock price is too high then the stock demand will decrease. Vice versa, stock 
demand will increase if the company has good performance and the stock price is stable or not too high. 

Investors consider if in the world stock market the price of shares becomes a priority, because it becomes a 

reference in making decisions to invest. Therefore stock price is very important because it causes changes 

in investor consumption behavior. 
(Group, 2017) indirectly claimed the thing that makes investors not interested in buying shares is a 

high stock price. If this continues, there will be a decline in the liquidity of these shares. Therefore, the 

company will issue a corporate action policy. The right corporate action for this situation is a stock split, 
which is the split of shares with fixed capital but the number of shares increases. According to Haris 

(2019), the right step to maintain the company's stock price by carrying out a stock splitting event. The 

issuer hopes that if the stock price decreases it will affect the liquidity of the shares to attract the interest of 

small investors so that demand rises and stock trading become optimal. Generally, if the share price rises 
out of control, it reduces the purchasing power of investors to invest in companies and the company will 

do a stock split. The stock split causes the number of shares to increase, but the value of the shares remains 

the same. Thus it attracts investors to buy shares because the value of circulating shares is smaller. 
Therefore, all information relating to the stock split becomes important and consideration for investors to 

buy shares of the company. 

(Kurniawati, 2013)in economics especially in the capital market said that stock split events are still an 

arguable science relating to their influence on the movement of company stock prices since there is 
difference opinion between practice and theory. Overprice share prices result in decreased stock price 

liquidity. By doing a stock split, it provokes investors’ interest to increase stock liquidity by trading. 

Generally research on stock split still produces different conclusion, especially in Indonesia. Information 

on the stock market will make a reaction when there is issue about the information that has an impact on 
the value of the stock, it can go up or go down. Fluctuation in stock prices can be measured by looking for 

results from returns or abnormal returns. 

Opinion difference resulting from the conclusion of this study is still very clear. The conclusion of the 
stock split produces opinion difference. It means that there are still many opinions that are pros and cons 

related to the movement of stock prices influenced by a stock split. This means that previous research does 

not agree with the principle of signaling theory and trading range theory which says if every event that 

contains information will affect the value of the company's shares. Researchers are interested in re-
conducting the research since there are differences of opinion and inconsistency between previous research 

trading range theory, and signaling theory. Problems that can be concluded as follows: 

How can stock split affect stock price movements? 
A positive signal is usually shown by the way of companies does corporate actions such as a stock 

split. This is because only companies that have good stock performance and high stock values are able to 

split stock prices. If an increase in stock liquidity occurs, it means investors have responded positively 

related to announcement of a stock split in the company so that there is an increase in demand.  
How is the movement of stock prices influenced by the stock split from the perspective of trading 

range theory and signaling theory? 

According to Signaling Theory, the prospect of a substantial increase in returns can be known from 
information about holding a stock split, whether the signal of long profits and short profits can be known 

through increasing returns. Whereas increasing of stock liquidity can be seen from the Trading Range 

Theory. 

 

METHODS 
 

The data used by the researchers in the form of a daily company stock price report on Indonesian 

Stock Exchange and they are processed by using the SPSS 18 application. The approach used in this study 
is a quantitative method because it is in the form of processing data from the report(Hartono, 2010). 

Researchers use secondary data to be used as data processing materials, data obtained through official 

website sources www.idx.co.id, and www.finance.yahoo.com. (Subalno, 2009)said data is data that has 

been archived, whether published or not. Secondary data can be in the form of reports, notes, evidence, 

http://www.idx.co.id/
http://www.finance.yahoo.com/


Femei Purnamasari et al. / Finance, Accounting and Business Analysis 2 (2) 2020 

85 
 

documents that have been archived by the company. According to (Bhuvaneshwari & Ramya, 2014) this 
study uses a period of 2 (two) months or 60 (sixty) days, by analyzing 30 (thirty) days before the stock 

price splitting event and 30 (thirty) days after the stock price breaking event. The study uses daily stock 

price report data taken from the close price the company's daily stock trading. The sample of this study is 

companies listed on Indonesia Stock Exchange and included in Indonesian Sharia Stock Index which 
conducts stock split. According to the purposive sampling method was used as the determinant in this 

study, because this study used certain criteria to be used as analysis material(Sugiyono, 2017). This 

research sample is a company with the following criteria: 
- Issuers included in ISSI 2018 

- Data ofcompaniesdid a stocksplit in 2018  

- Date ofeachcompanywhendoing a stocksplit 

- Stock split data which is seen from the daily stock price for 60 (sixty) days, with a calculation 
period of 30 (thirty) days before the stock split and 30 (thirty) days after the stock split, the 

processed stock price data is in the form of the closing price. 

This study uses secondary data and in the selection of samples using the method of purposive 
sampling method, out of 10 (ten) population companies that did a stock split in 2018, only 7 (seven) 

companies met the criteria, because 3 (three) companies were not included in ISSI 2018(Prakoso, 2016) :  

 

Table 1. Companiesdid a stocksplit in ISSI 2018  

Date  Issuer   Corporate comparison 

10/02/2018 PT MNC Land Tbk (KPIG) 1: 5 

08/01/2018 PT Bukit Uluwatu Villa Tbk (BUVA) 1: 2 

07/13/2018 PT GemaGrahasaranaTbk (GEMA) 1: 5 

07/09/2018 PT TotalindoEkaPersadaTbk (TOPS) 1: 5 
6/25/2018 PT GrahaLayar Prima Tbk (BLTZ) 1: 2 

06/04/2018 PT. MitraAdiperkasaTbk (MAPI) 1:10 

12/14/2018 PT Bukit AsamTbk (PTBA) 1: 5 

     Processed Secondary Data in 2019 

 
This study uses 2 (two) variables namely dependent variable and independent variable, each of 

dependent variables and independent variable has 1 (one) variable, consisting of stock split (X) and stock 

price (Y), as explained below: 

 

Independent Variable (X) 
 (Liana, 2009)Independent variable is the cause or something that affects the change of dependent 

variable. In this study stock split (X) becomes an independent variable. The researchers divide 

calculation into 2 (two) calculation phases, which are 30 (thirty) days before the stock price split and 30 

(thirty) days after the stock price split. 

 

Dependent Variable (Y) 
(Arikunto, 2006)Dependent variable is a variable that is affected by independent variable. The researchers 

make stock price (Y) as dependent variable. (Bhuvaneshwari & Ramya, 2014) measures 

return/fluctuation in stock prices. It can use abnormal returns, namely in the following ways:  
 

Actual Return 

Pi.t-Pi.t-1 
Ri.t  = Pi.t-1 

Information: 

Ri.t  = Return stock price i at time t 

Pi.t  = Stock Price i in period t 
Pi.t-1  = Share price in period t-1 
 

Expected Return 

          Ri.t               = 
𝑝𝑖.𝑡−(𝑝𝑖.𝑡−1)

𝑝𝑖.𝑡1
 

Information  

Ri.t  = returnofthe 1st daystockpriceonthe t event 

Pi.t  = sharepriceafter 
Pi.t-1  = sharepricebefore 

 



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Abnornal Return 

Sickle  = Ri.tR𝑚t 
Information 

Sickle  = abnormal returnonstockprice I onthe t-day 
Ri.t  = return i stockpriceonthe t-day 

Rm.t  = returnofstockpricesonthemarket 
 

Data Processing Techniques 

To determine the formulation of the problem in this study, researchers analyzed by using the following 

techniques: The first problem formulation analyzing technique  

  
Actual Return 

(Jones & Williams, 1998)Actual returns is the difference between stock price of yesterday and today which 

has occurred to analyze data to obtain the actual return result by calculating the difference between the 
daily stock price at a close price and yesterday stock price with today, or using this following formula:  
Pi.t-Pi.t-1 

Ri.t  = Pi.t-1 

Information: 

Ri.t  = difference stock price i at time t 

Pi.t  = Stock Price i in period t 
Pi.t-1 = Share price in period t-1 

 
Expected Return. 

Ri.t  = 
𝑝𝑖.𝑡−(𝑝𝑖.𝑡−1)

𝑝𝑖.𝑡1
 

Information 

Ri.t  = differenceofthe 1st stockprice in the t-eventperiod 

Pi.t  = currentshareprice 
Pi.t-1  = previousshareprice 

 

 To obtain abnormal return in this study, researchers used market-adjusted return method by reducing the 
results of actual return minus expected return using to get the results of abnormal returns. The 

calculation formula of abnormal returns is as follows: 

 
Abnornal Return 

Sickle  = Ri.tR𝑚t 
Information 

Sickle  = abnormal returnonstockprice i onthe t-day 

Ri.t  = difference in shareprice i onday t  
Rm.t  = difference in stockpricesonthemarket 

 

Kolmogorov-Smirnov Test 

To know two variables are distributed normal or not, they can be tested by using the Kolmogorov Smirnov 

test with regression models(Yustisia, 2018). The rules in finding decisions must use the normality test. 
The formula of finding probability value (p-value) is as follows: 

- If the probability value (P-value)> 0.05, it is normally distributed  

- If the probability value (P-value) <0.05, it is not normally distributed 
 

With the following partial formula: 

No  Xi Z=
𝑋1−𝑋

𝑆𝐷
 FT Fs [FT-FS.] 

1      

2      
Etc.      

 
Information : 

Xi  = Data number 

Z   = Switchover from numbers to notations in normal distribution 
FT  = Normal cumulative probability 

FS  = Empirical cumulative probability 



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FT  = cumulative proportion of normal curve size based on  
 

Test of One Sample T-Test  

Generally to compare the average sample examined with existing population averages, we use  One 

Sample t-test.  In addition to test descriptive hypotheses with scale or interval research data, we can use 

a one-sample t-test(Penelitian & Bisnis, 2009). The level of significance of the one-sample t-test was α = 

0.05 or 5%. From one-sample t-test if the value is greater than 5% (0.05) then Ho is accepted and Ha is 
rejected, but if the value is less than 5% (0.05) then Ha is accepted and Ho is rejected. The test formula 

is as follows: 

  

t = 
𝑥− 𝜇

𝑠

√𝑛

 

 

Information :  
x   = sampleaverage 

µ   = average population / previous research 

S.   = Standard Deviation 

n   = number of samples 
 

Test of Paired Samples T-test 

(Irmayani & Wiagustini, 2015)The effect of stock prices on samples before split and after split can be 

measured by paired sample t-test. To know whether there is an abnormal return in stock price 
movements researchers analyzed abnormal returns 30 (thirty) days before the stock price split and 30 

(thirty) days after the stock price breaking event. This research has a significance level of α = 0.05 or 

5%(Potochnik et al., 2018). If the hypothesis test produces a value greater than 5% (0.05) then Ho is 

accepted, with the information that there is no significant difference, but if the value is less than 5% 

(0.05) then Ha is accepted by showing that there is a significant difference. Following is the formula of 
the paired samples t-test: 

 

  
X₁  = sample average before the stock split 

X₂  = sample average after stock split 

S.₁  = standard deviation before the stock split 

S.₂  = standard deviation after the stock split 

n₁  = number of samples before the stock split  

n₂  = number of samples after stock split 
 

The second problem formulation analyzing technique  

Test of One Samples T-Test : 

(Penelitian & Bisnis, 2009)Generally to compare the average sample examined with existing population 

averages, we use  One Sample t-test.  In addition to test descriptive hypotheses with scale or interval 

research data, we can use a one-sample t-test. The level of significance of the one-sample t-test was α = 
0.05 or 5%. From one-sample t-test if the value is greater than 5% (0.05) then Ho is accepted and Ha is 

rejected, but if the value is less than 5% (0.05) then Ha is accepted and Ho is rejected. The test formula 

is as follows: 

t = 
𝑥− 𝜇

𝑠

√𝑛

 

 

Information :  
x   = sampleaverage 

µ   = average population / previous research 

S.   = Standard Deviation 

n   = number of samples 
 

Test of Paired Samples T-test 

The effect of stock prices on samples before split and after split can be measured by paired sample t-test. To 

know whether there is an abnormal return in stock price movements researchers analyzed abnormal 

returns 30 (thirty) days before the stock price split and 30 (thirty) days after the stock price breaking 

event. This research has a significance level of α = 0.05 or 5%. If the hypothesis test produces a value 
greater than 5% (0.05) then Ho is accepted, with the information that there is no significant difference, 



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88 
 

but if the value is less than 5% (0.05) then Ha is accepted by showing that there is a significant 
difference. Following is the formula of the paired samples t-test: 

  

 

 
 

 

X1 =average sample before stock split 
X2 =flat- average sample after stock split  

S1 =deviation raw before stock split 

S2 =deviation raw after the stock split  

n1 =total the sample before stock split  
n2 =total the sample after stock split 

 

Theoretical framework for discussion 
3.1 Stock Split  

(Darmadji & Fakhruddin, 2012) claimed stock split is a nominal breakdown of smaller shares, for 

example, one share with a value of Rp. 5,000 then the company did a stock split with a ratio of 1: 5, 

then one share that had been valued at Rp. 5,000 is now Rp. 1,000 but the number of shares has 

increased.(Pittaway & Cope, 2007) said that corporate action of stock price split is a step of the 
company to improve stock liquidity by splitting stock prices or in the world of capital markets called 

stock split. The stock split action only increases the number of shares outstanding but does not increase 

capital, if at first 1 share is worth Rp. 5,000 then company conducts a stock split of ratio 1: 5, the 
number of shares will be 5 shares with a value per share of Rp. 1,000 

3.2 Abnormal Return 

(Bhuvaneshwari & Ramya, 2014) argued abnormal return is the difference between the actual return and 

expected return. if the difference is positive then the stock price rises, which means the stock split has a 
positive influence on the movement of stock prices, but if the abnormal return is negative then the stock 

price decreases, which means the stock split has a bad influence on the movement of stock prices. 

 
3.3 Signaling Theory  

According to (Gumanti, 2009) signaling theory is a signal theory that if a company does something 

corporate action that is informational, there will be a reaction to investors. Corporate action stock split 

is considered as a signal from company leaders to the public that a positive performance has been 
carried out by the company so that if investors buy shares there will be an increase in stock prices and it 

can benefit investors. 

3.4 Trading Range Theory 
(Gumanti, 2009) said that corporate action is in line with trading range theory. According to this theory 

stock split can increase company stock liquidity because if stock prices are high then buying interest 

from investors decreases so that there is no movement in stock prices, but if the stock price is broken 

down and becomes smaller it is expected to attract investor interest and will increase company 
liquidity. (Indarti & Purba, 2011) conducted a survey that became the tendency of managers to split 

stock prices to maintain the equilibrium price of the company's shares so that investors were still many 

in number. 
 

Applications of stock price movements that are affected by a stock split 

The value of the abnormal return (actual return-expected return) both before the stock split and after the 

stock split can be seen in the following table: 

  

Table 2. Abnormal return value before and after the stock split 

Date Before Date After 

-1 0.009 1 -0,015 

-2 0.066 2 -0.006 

-3 -0,039 3 -0,301 
-4 0.043 4 0.043 

-5 .001 5 -0,029 

-6 -0,027 6 -0,012 

-7 .001 7 .001 
-8 0.042 8 0.057 

-9 0.031 9 -0.006 



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-10 -0,012 10 -0,039 
-11 0.013 11 0.027 

-12 0.005 12 0.046 

-13 -0.008 13 -0,041 

-14 -0,036 14 0.051 
-15 -0,029 15 -0,013 

-16 0.011 16 -0.008 

-17 -0,068 17 0.031 
-18 -0,027 18 0.007 

-19 -0.009 19 -0,041 

-20 0.025 20 -0,039 

-21 -0,023 21 -0,057 
-22 0.041 22 0.041 

-23 -0.009 23 -0,014 

-24 -0,012 24 0.015 
-25 0.009 25 -0,013 

-26 -0,017 26 0.012 

-27 -0,037 27 0.018 

-28 -0,036 28 0.042 
-29 0.005 29 0.019 

-30 -0,087 30 -0.01 

Source: data processed using SPSS 18, (2019) 

 

From the results above,it is known that there is fluitive in abnormal stock return of companies that 
carry out a stock split. in this case,there is negative and positive stock return.(Patel et al., 2016)After 

knowing that analyzed companies carried out a stock split and had abnormal return at their stock 

price,then the next phase is testing the normality of abnormal return result to find out whether those 

variables have been distributed normally or not.the normality test used Kolmogorov-Smirnov 

test.Kolmogorov-smirnov test.(Lopes, 2011)said to determine whether a data is normally distributed or 
not it can be seen from the regression results. To test the normality of data in this study researchers use the 

Kolmogorov-Smirnov test, the following table is results from the Kolmogorov-Smirnov test: 

 

         Table 3. Normality test results (Kolmogorov-smirnov test) 

One-Sample Kolmogorov-Smirnov Test 

 before after 

N 30 30 

Normal Parameters, b The mean 8.3333 -5.5333 

Std. Deviation 26,84738 29.56201 

Most Extreme Differences Absolute . 103 .121 
Positive .079 .999 

Negative -.103 -.121 

Kolmogorov-Smirnov Z .563 .662 
Asymp. Sig. (2-tailed) .909 .774 

a. Test distribution is Normal; 
b. Calculated from data. 

Data processed using SPSS 18, (2019) 

 

The P-value of abnormal returns before the stock split event in this study was 0.909, this value is 
greater than 0.05, which means it can be concluded that the normal return is normally distributed, and the 

P-value of the abnormal return after the stock price split event in this study is 0.774, this value is greater 

than 0.05, which means it can be concluded that the value of the abnormal return is normally distributed. 
Based on the results of abnormal returns before and after the stock price split tested for normality using the 

Kolmogorov Smirnov test, it can be concluded that the abnormal return values are normally distributed, 

then paired sample t-test or statistical test will be conducted. 

  

Test of One Samples T-Test 
Abnormal return reactions caused by stock split events can be seen through test of one sample t-test. In the 

period of observation the researchers can see whether there is an effect caused by the stock split event 

using this test during the observation period. The level of significance in this test is 0.05. Data 



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processing in this test uses the SPSS 18 application with the following results: 
 

 Table 4. Result Test of One sample t-test 

One-Sample Test 

 
Test Value = 0  

T df Sig. (2-tailed) Mean Difference 

95% Confidence Interval of the Difference 

Lower Upper 

Before 1976 30 .058 8.333333 -.3112 17,9778 

After 3,322 30 .002 14.00000 5.3812 22.6188 

  Data processed by SPSS 18, (2019) 

 

Observation from one sample t-test test shows that when the observation period before carrying out a 
stock split the abnormal return of the stock price is not significant, the result is 0.058> 0.05 which means 

that at 30 (thirty) days before the stock split there is no abnormal return, but when after a stock split occurs 

the market reaction is proven by testing this one-sample t-test the value is 0.002 <0.005, which means that 
at 30 (thirty) days after the stock split there is a reaction to the movement of its shares. This means the 

stock split event conducted by the issuer gives positive impact. 

 

Test of Paired Sample T-Test 

In testing the hypothesis of this study, researchers used paired sample t-test. This test method 
compares the average abnormal return at the time before the stock split and after the stock split. The 

significant value resulted from the paired sample t-test by processing the abnormal return results used the 

SPPS 18 application as in the table below: 
                                           

Table 5. Tested paired samples T-test 

Paired Samples Test 

 

Paired Differences 

T df 

Sig. 

(2-
tailed) 

The 
mean 

Std. 
Deviation 

Std.  

Error 
Mean 

95% Confidence Interval of the 

Difference 
Lower Upper 

Pair 

1 

before 

after 

13,86667 35,19770 6.42619 .72363 27.00970 2,158 29 .039 

            Data processed by SPSS 18, (2019) 

 

This test is to find out the results of the abnormal returns before the stock price split event and after the 

split event. It is known in the table above that there is significance in the abnormal return of this research 

that is equal to 0.039. This research has a significance value α = 0.05 or 5%, which means this solution 

affects the stock price movement. Seeing from the abnormal return tested using paired sample t-test, so the 

hypothesis stating that "stock prices are influenced by stock split" is accepted. 

 

CONCLUSION 
 

The results of paired sample t-test conducted by researchers show the results of the analysis of the 

significant value in the paired sample t-test is 0.039, smaller than 0.05. It means that in the observation 

period 30 (thirty) days before the stock price split and 30 (thirty) days after the stock price split had a 
positive effect on the stock price liquidity of the companies that carried out a stock split at the 2018 

Indonesia Syariah Stock Index 

Abnormal return on stock prices before and after stock splits is tested using a one-sample t-test to see 
whether there is an influence before and after stock splits. In testing, the results of the significance is 0.058, 

in other words it is bigger than 0.05. This means before stock split there is no significant stock price 

movements seen from abnormal returns tested, but when it has been done stock split there is a significant 

stock price movement seen from the results of 0.002 or 0.002> 0.05 which means there is a significant 
movement in stock prices after the company made a stock price split. This research is following the 

signaling theory and trading range theory which are used as theoretical foundation. 

It can be said stock prices on the stock market is strongly influenced by the activities of the company, 
including the activities of corporate action to split stock prices that have an impact on stock liquidity. Yet 

many factors can affect stock prices including internal factors because companies have different stock 

prices which depend on the type of business of the company. Besides internal factors, stock price 

movements are also influenced by external factors, usually due to economic, political, regulatory policies 
and stock market reactions that are influenced by issues(Hermuningsih, 2014). Furthermore, causes of 



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91 
 

changes in stock prices are believed to be related to those factors. 
 

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