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MSM – DBA Proposal – Partners’ Conference 2005 1

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Set of
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Extrinsic Value of LQ45 companies Extrinsic Value of
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indicator Exchange (JSX)

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Private Institutional Selected Companies on

1 Jakarta Stock Exchange
2a & b (JSX)

3b
Field Survey of Investors on Error on Prediction Extrinsic Value of
Jakarta Stock Exchange Analysis Share
4
(JSX) 6

Getter Data from the Past

Indicators Used (Time Series) +
3a
Analysis
Field of Database 0
Factor Affecting Extrinsic Value of Share 5
Make Data Base -

Artificial Intelligence Split

9
Input
Finetunning EM Indicxator (The Best)
7 8
Others
Knowledge Basis Validation Basis
Validation 10 Others

MVIC/EBITDA is the Best

for JSX
New Cases
11
Enterprise Multiple

Invested Capital
Market Value of
Speculative
Index

Predict Future Extrinsic Value

Conclusion 12, 13 & 14

Extrinsic Value of EBITDA
Equity Shares

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Bloomberg exchange
JSX (333 listed companies)
rate, 1 US$ = Rp 9,167,-
Market capitalization total =
US$ 77.79 Billion
CSPI as of Feb 01, 2005 = 1.045

Field of
investigation
LQ 45 (45 companies) Non LQ 45
Market capitalization = Market capitalization =
US$ 59.99 Billion US$ 17.80 Billion
( 77.1% JSX) ( 22.9% JSX)
Object of
research

LQ 45 Non Banking Sectors LQ 45 Banking Sectors

38 Companies 7 Companies
Market capitalization = Market capitalization =
US$ 37.48 Billion US$ 22.51 Billion
( 48.2% JSX) ( 28.9% JSX)

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Research Goals Hypotheses Underlying Method for Testing Possible Results

Theories Hypotheses
1.The evidence of a H1: LQ45 represent the Market Capitalization Content Analysis Motivation of investors
significant correlation JSX market EV of Equity Shares
between EM and EV capitalization MVIC EVA & FCFF EM is the best metrics
on JSX. Valuation, ARMA, for JSX
EBITDA
Enterprise Multiple Monte Carlo
Simulation, Gap
Motivation and analysis
2.To elaborate and The Extrinsic Value of Behaviour of Investors
evaluate, is there is Equity Shares of LQ45 Understanding the
any correlation companies will be Perspective of EV will be affected by
ANN, SEM, SSM,
between the mainly affected by: Investors changing the MVIC,
Cognitive Mapping
changing of MVIC H2: Changing (voluntary) Valuation of EBITDA & EM
and EBITDA of LQ45 the MVIC Companies in
companies with their LQ 45 represent JSX
H3: Changing (voluntary) Emerging Markets EM is strongly correlated
EV as rated on JSX. the EBITDA Best Practices in with EV
3.To predict the Future H4: Changing (voluntary) Emerging Markets
EV, to support the the EM
investment decision.

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MSM – DBA Proposal – Partners’ Conference 2005 9