Modelling Equity Shares of LQ45 Companies Quoted at the Jakarta Stock Exchange

This paper analyses and inteipretes model of equity shares quoted at the Jakarta Stock Exchange (JSX). It examines critically the impact of external risk factors on the Enterprise Multiple (EM) and the Equity Share Values (EV) of investments in LQ45 companies at JSX where investors are yet to optimize their investment opportunities in LQ45 company equity shares. The basic thesis of this paper is that an understanding of the interrelationship among EV, EM, and external risk variables that affect the values of these equity shares can help investors to manage their portfolios more effectively. The paper shows that the movements of LQ45 company equity share prices as well as sectoral indices are significantly correlated with changes in external risk factors.