Analysis of Information Contens and Stock Liquidity on the Companies Which Splitting Their Stock: Examination to Signaling and Trading Range on Jakarta Stock Exchange (Study on the Companies Splitting Their Stock on the Year 2000-2003)

This research was held to examine signaling hypothesis by comparing the growth of companies profit which splitting their stock and not splitting their stock, on the period before stock splits and comparing yearly profit increase over 4 years before stock splits on the companies which splitting their stock. This research also conducted to examine trading range hypothesis by comparing market stock price the companies which splitting their stock and not splitting their stock before stock split was done, and comparing trading volume 10 days before and after stock splits on the companies which splitting their stock on Jakarta Stock Exchange on the period 2000 - 2003. Two statistical analysis were used in this research, parametric statistic i.e. independent t test, paired t test, and the non parametric statistic i.e. Mann-Whitney U test. Normality and equality of variance were done to determine which analysis should be used. Sample size of this research consist of 28 companies which splitting their stock and 60 companies which not splitting their stock. Sample was chosen by simple random sampling. The result of this research shows that there is a signaling on profit growth differences in the year 2001, there is no signaling on yearly profit increase over 4 years before stock splits. On the other hand, there is a trading range on market stock price in the year 2000 and 2003, as well as trading volume. This research shows that there is a contradiction between signaling and trading range in Jakarta Stock Exchange. This result suggest that the need future research to assert the consistency of this contradictory phenomenon